Third party car insurance

Receive million dollar liability cover with third party car insurance.

Third-party insurance is a basic form of car insurance for Kiwi drivers. This type of policy provides cover when your car causes damage to someone else’s vehicle or property and also covers your legal liability up to a specific limit, eg $20 million. These policies sometimes include cover when your car is damaged, in a no-fault accident with an uninsured motorist.

Third party car insurance is available from a wide variety of respected New Zealand insurance providers.

Man Driving Scenic

What does third party car insurance cover?

Third-party is defined as car insurance which covers you for damage to other people’s property, for example, their car or home, up to a certain limit, (eg $20 million). Third-party insurance only covers this and nothing else, except for some policies, which partially cover damage to your vehicle as well, even if you are at fault. Cover includes:

  • Repair or replacement cost, for damage to other people’s property.
  • Legal costs you incur while defending yourself against liability claims.
  • Limited damage to your car, if you’re involved in a collision with a vehicle driven by an uninsured driver.

Additional benefits

Although third party insurance is a pared down policy, some insurers have other benefits that provide added security, without raising costs to the level of a comprehensive policy. These additional benefits may include:

  • Loss or damage to your personal items
  • Cover for modifications and accessories
  • Emergency repairs
  • Towing
  • Temporary replacement vehicle

What’s the difference between third party and other car insurance?

Comprehensive, third party fire & theft and third party are the three levels of car insurance on offer from most insurance providers.

Feature
Comprehensive
Third Party Fire and Theft
Third Party Only
Legal Liability
  • Yes
  • Yes
  • Yes
Immediate Replacement Car
  • Yes
  • Yes
  • Yes
Damage to other people’s property
  • Yes
  • Yes
  • Yes
Fire
  • Yes
  • Yes
  • No
Malicious damage
  • Yes
  • Yes
  • No
Theft
  • Yes
  • Yes
  • No
Collision
  • Yes
  • No
  • No
Earthquake
  • Yes
  • Yes
  • No
Emergency Accommodation, Transport and Repairs
  • Yes
  • Yes
  • No
Towing Costs
  • Yes
  • Yes
  • No
Contents Inside the Car
  • Yes
  • Yes
  • No
Accidental Damage
  • Yes
  • No
  • No
Intentional Damage
  • Yes
  • No
  • No
Storm or Flood
  • Yes
  • No
  • No
Hire car following theft
  • Yes
  • Yes
  • No

How much does it cost?

When calculating third party insurance premiums, insurers consider questions like:

  • How old are the people driving your car? Younger drivers are more inexperienced and also feature heavily in New Zealand road crash statistics, which means they cost more to insure.
  • Are you a good driver? Drivers with a long, blemish-free driving record cost less to insure than those who have made claims in the past and have multiple traffic infringements to their name.
  • How much excess do you want to pay? If you want to save money on your premium, you can elect to pay a higher excess on your car insurance policy.
  • Where do you keep your car at night? Areas with a high theft and accident risk will usually result in higher insurance premiums for car owners.
  • What type of car do you drive? Inexpensive, low-powered vehicles are typically cheaper to cover than high powered, expensive vehicles. Any modifications or accessories fitted to your car are also taken into account.
  • How often do you use your car? If your vehicle is used for business purposes, or more frequently than most, you may have to pay a higher premium. Alternatively, if you don’t drive very often, you may be able to opt for “Pay As You Drive” policy.

Tips for receiving lower premiums

  • Shop around. Don’t sign up for the first policy you see, because you saw a convincing ad on TV. Compare the cover offered by different policies to find a better deal. If you think you’re paying too much, get quotes from other insurers.
  • Compare quotes. Getting car insurance quotes online is quick and easy. Obtain quotes from multiple insurers and compare them to the level of cover on offer.
  • Choose a higher excess. Your insurer will offer you a lower premium in return.
  • Nominate drivers. If you can nominate specific people to drive your car, especially if they are over the age of 25, it will reduce the cost of cover.
  • Bundle your cover. If you have a separate policy, (eg home insurance) with a provider, they may offer you a discount on your car insurance.
  • Buy online. Many insurers offer sizeable discounts to their customers for purchasing policies online.
  • Secure your vehicle. Vehicles with security systems and those that are kept garaged overnight are less expensive to insure than ones parked on the street or without security systems.

What type of car insurance do I need?

How do I choose the right car insurance policy for me? You need to consider a range of factors.

  • Is your car expensive? If you drive an expensive car, you will most likely want to take out comprehensive cover to give your vehicle, and your wallet, the ultimate protection. If your car is a little less valuable, selecting a lower level of cover like third party or third party fire & theft may be a more suitable option.
  • Do I need these benefits? You only want to pay for the benefits and options you’re likely to use, so make sure you know what is covered under different policies before you decide on the right one for you.
  • Would your car be expensive to repair? Consider how likely it is you can afford the repairs if you’re involved in an accident, or how you’ll manage on a day-to-day basis if your car is stolen and you don’t have cover in place. Answering a few hypothetical questions will help you determine the level of protection that suits your needs.

What kind of exclusions are there?

Some general exclusions apply to most third-party policies. These include if your car was:

  • Being used for driving tuition or demonstrated for sale at the time of the incident
  • Being driven by an unlicensed driver
  • Being used in a race, trial or test
  • Modified from the maker’s specifications or fitted with non-standard accessories
  • Being operated in an unsafe or un-roadworthy condition
  • Overloaded
  • Being used for hire or reward
  • If the driver was under the influence of alcohol or drugs, or if they refused to submit to drug and alcohol testing
  • If your claim is for the reduced value of your vehicle after repairs have been adequately performed
  • If your claim is for personal items stolen from your car
  • If your claim is for repairs carried out without the insurer’s consent
  • If your claim is for depreciation, wear and tear, rust or corrosion
  • If your claim is for mechanical, structural or electrical breakdown
  • If your claim is for consequential loss
  • If you have failed to take reasonable steps to prevent any loss or damage
  • If your claim is for tyre damage caused by braking, punctures bursts and cuts
  • If the loss or damage was incurred thanks to a deliberate or reckless act by you
  • If your claim results from the lawful seizure or repossession of your car
  • If your claim relates to acts of war or terrorism
  • If your claim is for additional loss suffered when driving your car after it has been involved in an accident

Some final questions you might have

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