Can You Drive a Car With no Insurance?

Written by
Bruce Pitchers's profile picture
Bruce Pitchers
Content Manager NZ
Source: NaMong Productions92/Shutterstock.com
Source: NaMong Productions92/Shutterstock.com

In New Zealand car insurance is not compulsory, but should you get car insurance anyway? Canstar explores the benefits of vehicle insurance and the risks involved without it.

Key Points

  • In New Zealand, there is no legal requirement to have car insurance, so it's not illegal to drive without it.
  • However, driving without insurance poses significant financial risks, as individuals are personally responsible for any damage they cause in road-traffic accidents, or could be hit by an uninsured driver.
  • Canstar's star ratings and car insurance awards provide expert guidance when comparing car insurance policies’ levels of cover and value for money.

In New Zealand, unlike many other countries, there is no legal requirement to have car insurance. While it's strongly recommended to have insurance coverage for protection against accidents and liabilities, it's not illegal to drive without it.

However, driving without insurance still poses significant financial risks, as individuals are personally responsible for any damage they cause in accidents. Therefore, while it's not mandatory, it's highly advisable to have car insurance in New Zealand to safeguard against potential financial burdens resulting from accidents.

What are the benefits of car insurance?

1. Financial protection

Car insurance provides coverage for damages to your vehicle caused by accidents, theft, vandalism, or natural disasters.

Vehicle insurance also includes liability coverage, which protects you from financial responsibility if you injure someone else or damage their property in an accident.

2. Peace of mind

Knowing you have insurance coverage gives you peace of mind while driving. You can focus on the road without worrying about the potential financial consequences of accidents.

3. Roadside assistance

Many car insurance policies offer roadside assistance services as an optional extra. These are often priced below similar standalone services available in the market, and offer services such as towing, battery jumps, and tyre changes, which provide convenience and support should your car break down.

What are the risks of driving without insurance?

Driving without insurance is legal in New Zealand, but it still carries significant risks:

1. Financial liability

While not required by law, without insurance, you are personally responsible for any damages or injuries you cause in an accident. This could result in substantial out-of-pocket expenses, including any medical bills not covered by ACC and vehicle repair costs.

2. Limited protection

In the event of an accident, you could face significant financial losses without the coverage provided by insurance. Should you damage or write off your car, you will have to foot the bill for repairs, or for a replacement vehicle.

3. Difficulty getting assistance

In case of an accident that's not your fault, you may find it challenging to obtain financial assistance or compensation from the other driver yourself without the help of an insurance company.

Should you get car insurance?

Whether or not car insurance is legally required, signing up to an insurance policy offers valuable financial protection and peace of mind. Insurance can safeguard against significant expenses stemming from vehicle damage or legal liability. For those reliant on their vehicles or concerned about unforeseen financial burdens, investing in car insurance can provide essential security and mitigate risks associated with driving.

However, you may choose not to get car insurance if you can comfortably cover vehicle repair costs and liability claims out-of-pocket. If you rarely drive or if your vehicle is of minimal value, insurance may not be worth the premiums. However, it's crucial to consider the potential financial risks and legal requirements before deciding against insurance coverage, especially if you cannot afford unforeseen expenses.


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Bruce Pitchers's profile picture
Bruce PitchersContent Manager NZ

Bruce Pitchers is Canstar NZ's Content Manager. An experienced finance reporter, he has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and NZ, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. As a freelancer, he has worked for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the DrivenStuff and One Roof websites, the NZ Herald, Radio NZ, and Newstalk ZB.
Away from Canstar, Bruce creates puzzles for magazines including Woman’s Day and New Idea. He is also the co-author of the murder-mystery puzzle book 5 Minute Murder.

Important Information

For those that love the detail

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.