Comprehensive or third party? Your guide to car insurance in New Zealand

With nearly four million cars travelling on New Zealand’s roads, drivers need the confidence to know that if unforeseen incidents occur, insurers can step in and save a whole lot of hassle. 

In this article, Canstar explains the different types of car insurance available in New Zealand, to help you narrow down your options. 

What you need to know

As one of our biggest assets – and most expensive things to fix if things so wrong – having car insurance can be the difference between a financial burden and sweet relief, if incidents such as accidents, theft and damage occur.

The main types of car insurance available to Kiwis are: 

  • Comprehensive 
  • Third party
  • Third party fire and theft
  • Specialised.

When taking out a car insurance policy, it’s important to consider your lifestyle and financial situation, to help you work out the type of cover you need. Premiums, for example, are your regular car insurance payments, each policy will have a different premium amount which is based on the type of cover required and excess amount chosen. So, it’s important to choose an affordable policy that is  best suited to your needs.

Compare car insurance with Canstar

What’s an excess?

The word “excess’ features heavily in policy wording, so you’re bound to come across it when you’re researching car insurance policies. 

An “excess” is a payment policyholders pays towards a claim. As car insurance policies account for many different circumstances, the amount of excess contribution can vary depending on the situation. 

Usually, the lower your excess, the higher your regular premium payments are so, if you don’t use your car often (therefore limiting the likely event of an accident) if can be more cost effective to choose a lower premium as opposed to a lower excess amount. 

Comprehensive car insurance 

A comprehensive car insurance policy is the most common type of motor vehicle insurance as it provides the highest level of cover for its customers, however it can also be the most costly. 

Offering complete coverage for policy holders, this type of car insurance will pay, not only for loss, theft or damage to your vehicle, but also for any accidental damage to the other party’s vehicle or property, if you were at fault. 

If your car is financed, then having comprehensive car insurance is highly recommended. 

While the finer points of comprehensive car insurance policies differ between insurers, many include provisions for lost or stolen keys, windscreen and window protection as well as no-claims bonuses and no-excess options.  

Third party car insurance

Third party car insurance cover is the most basic and often the cheapest form of car insurance available in New Zealand.

This type of insurance does not cover any damage to your vehicle.

Instead, it only covers damage caused by you to another person’s vehicle. 

Third party car insurance can be a cost effective option for car owners who only drive sporadically, or cannot afford to keep up with higher premiums. 

Third party fire and theft car insurance

Offering a step up from the basic ‘third party’ package, third party fire and theft car insurance is popular in New Zealand because it costs less than comprehensive car insurance premiums, but still provides drivers with substantial cover.

This type of car insurance insures you if your car is stolen and needs replacing, if your car catches on fire, and pays for repairs necessitated by damage to a third party. 

This type of cover can also cover any damage to your vehicle that is caused by a natural disaster.

Specialised car insurance

Specialised car insurance applies to vehicles more than 25 years old.

With this type of insurance, you’ll receive all the same benefits of many comprehensive car insurance policies, however, you must stay within a predetermined annual mileage.

This type of insurance is particularly suitable for owners with classic or vintage cars, as well as other types of unusual vehicles. 

Car Insurance in New Zealand

Unlike other countries, in New Zealand it is not a legal requirement to have car insurance, however, we’re sure that any vehicle owner that has been in an accident would agree having car insurance of some variety is a non-negotiable. 

Not all car insurance policies are created equal, and some feature unique benefits, such as roadside assistance, which may appeal specifically to your needs. To find out which policy, and which insurer best suits you, use Canstar’s handy comparison table below which provides expert ratings from consumers just like you. 

Compare car insurance with Canstar

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