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Top picks for March 2022

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Most Satisfied Customers Award | State

Coming out on top is State, the clear winner of Canstar’s award for Most Satisfied Customers for Car Insurance.

State is the only provider in this year’s award to earn a top 5-Star rating for overall satisfaction. It’s a result achieved on the back of exemplary scores in all categories: a mix of 5-Star and 4-Star ratings across the board.

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If you’re looking to save on regular expenses, comparing comprehensive car insurance could be a great place to start. Canstar helps you shop around dozens of policies based on your situation, and lets you easily filter and sort products based on what matters to you. As part of our mission to inform consumers of the best NZ has to offer, each year Canstar’s expert team researches and rewards the best car insurance providers in the market.

Important notes

Overall satisfaction is an individual rating and not a combined total of all ratings. Brands with equal overall satisfaction ratings are sorted by the mean overall satisfaction score as rated by consumers. Canstar research finalised in July 2021, published in September 2021. Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Canstar is not providing a recommendation for your individual circumstances. See our Detailed Disclosure.

See our Ratings Methodology.

 

What is car insurance?

Car insurance in New Zealand gives drivers some protection from financial loss if their car is involved in an accident, is stolen, is damaged in a weather event or another risk included on your policy. If your car is damaged or written off, or you damage someone else’s vehicle in an accident, the cost to you could be significant, and a car insurance policy is designed to cover the majority of that cost.

Comprehensive car insurance is the highest level of car insurance coverage in New Zealand. It provides a level of financial cover for damage to other people’s cars and property in an accident, damage to your own vehicle caused by fire or theft, and accidental damage to your own vehicle, regardless of who caused the damage. It may also provide additional types of cover, such as damage to your car from storms or vandalism, depending on the insurer and policy you choose.

A comprehensive car insurance policy may also let you choose between market value and agreed value for your policy, meaning you could get a say in how much you’ll be paid in the event that your car is stolen or written off, depending on the policy. However, your choice may affect your premiums.

Note that comprehensive car insurance does not cover you for injury or death caused to other people in an accident – that’s where compulsory third party (CTP) insurance comes in.

Choosing the policy that’s right for you could depend in part on what you can comfortably afford, so it may be worth considering the type of cover that suits your needs and your budget. For example, would you prefer the high-level cover generally offered by a comprehensive policy, or would a lower level of cover be enough?

If you decide that comprehensive cover is right for you, you can start your search by comparing car insurance policies with Canstar before getting a quote online.

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What does car insurance cover?

Car insurance covers policyholders for damage caused or costs incurred by unforeseen accidents or events involving the car they insure. The exact risks that are covered will depend on the level of cover that you have. For example, third party cover generally only covers costs if you damage someone else’s property in an accident, whereas comprehensive car insurance provides protection for a more extensive range of risks. Depending on the insurer and policy you choose, comprehensive car insurance could cover:

  • Accidental damage
  • Theft/vandalism
  • Storm/flood
  • Fire damage
  • Earthquake
  • Towing costs
  • Transport from an accident
  • Hire car costs following theft
  • Hire car costs following a no-fault accident

 

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What types of car insurance are available in New Zealand?

With so many car insurance policies on the market, it’s easy to get confused about what they do and don’t offer. Although policies offered by different car insurers will vary, the types of car insurance can be boiled down to three levels of cover.

  • Third-party insurance: The most basic type of insurance – it covers all or part of your legal liability if you harm another person or damage their property. You will not be covered for damage to your own vehicle.
  • Third-party, fire & theft cover: This is the same kind of insurance as standard third party, with additional cover for fire damage and theft. Some insurance companies will have policies that also cover damage caused by natural disasters.
  • Comprehensive insurance: This is the highest level of car insurance, covering you for almost anything that could happen on the road, or by the side of it. If you damage your or another person’s property, you won’t be required to pay the full amount for repairs – only the pre-agreed excess amount.
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How do I compare car insurance quotes online?

Canstar’s Star Ratings are one factor you could use to help you compare comprehensive car insurance policies before getting a quote online. Our Ratings use a sophisticated and unique methodology that compares both price and features across products on our database. You can compare policies based on their Star Ratings using our comparison tables.

In addition, these are some of the other factors you may want to take into account when comparing car insurance policies:

  • The premiums being charged
  • The level of cover you are getting
  • Whether the risks most relevant to you are covered by the policy (e.g. if your area is prone to flooding, you may want a car insurance policy that covers this)
  • The level of service the insurer offers (e.g. its claims service)
  • Whether the insurer allows you to pay monthly at no extra cost
  • Any discounts offered by the insurer
  • Are there any additional inclusions, either complimentary or at at any extra cost (e.g. roadside assistance)elipses

 

What’s the best car insurance for me?

The best car insurance policy for you will depend on your circumstances and the level of cover you are looking for. In assessing policies, you may like to ask yourself questions such as:

  • Are you looking to keep premium costs down or are you willing to pay more for a higher degree of cover?
  • How often do you think you’ll need to claim on the policy? Opting for a higher car insurance excess could save you some money on premiums, in exchange for leaving you with higher out-of-pocket costs should you have to make a claim.
  • How often do you drive your car? If you rely heavily on your car, you might want to prioritise a higher level of cover so you won’t be off the road for too long if your car is damaged.
  • Are there any particular risks that you want cover for? For example, is your area prone to flooding or car thefts?
  • Would it be better for your budget to pay your premiums monthly or annually, and would you be prepared to pay more overall for the convenience of monthly payments?
  • If you are looking for comprehensive cover, how have Canstar’s expert researchers rated the policies you are considering? This can give you an idea of which policies offer the best value for money overall, based on the factors considered.

 

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Looking for the cheapest car insurance?

When you’re shopping around for cover, you may simply want to get the cheapest car insurance policy you can find. It can be important to also keep in mind the level of protection you’re getting for your money. For example, with optional forms of cover, third party property may be the cheapest car insurance in most situations, but it won’t cover you if your car is damaged in an accident or stolen.

Even if you decide on a higher level of cover, like comprehensive, there may be ways to keep the cost down. Some insurers offer discounts if you pay your premium annually or take out the policy online as opposed to over the phone, or you could opt to pay a higher excess if you need to make a claim. It can also help to shop around and compare quotes online from a number of insurers. These techniques may help you get value for your money, while still getting a higher level of cover than the cheapest car insurance might offer.

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How to save on car insurance in 2022

If you’ve been driving your car less than usual and spending more time at home due to the COVID-19 pandemic, it may be worth asking your car insurance provider whether you are eligible for a premium discount on account of the lower mileage. Some car insurance providers may be willing to consider a discount for people who don’t use their car often, or who are driving less than they used to.

 

Read Canstar’s review of car insurance brands

                                                                      

 

Car insurance frequently asked questions

Please note that these are a general explanation of the meaning of terms used in relation to this topic. Your provider may use different wording and you should read the terms and conditions of your policy carefully to understand what you are and are not covered for. Refer to the product disclosure statement (PDS) and other documentation from your provider. You may wish to obtain advice from a suitably qualified adviser. 

The cost of car insurance, known as the premium, is typically calculated by insurers based on the level of risk they associate with the driver and their vehicle, plus the level of cover offered by the policy. To calculate the risk, insurers generally take the policyholder’s personal circumstances into account – such as their age, gender, driving and claims history, and where they live – as well as details relating to the vehicle, including its make, model and age. Generally speaking, the greater the risk the insurer believes they are taking on by insuring a driver, the higher that driver’s premium will be.

The type of policy you are buying will also dictate the cost of car insurance. For example, a comprehensive car insurance policy will typically cost more than a third party property policy, but will generally offer a higher level of cover.

To give you an idea of cost, Canstar has calculated the average costs of comprehensive car insurance policies on its database.

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Comprehensive cover is the highest level of policy coverage available in New Zealand and covers drivers for a range of risks, whether it’s the cost of damage you have caused to someone else’s vehicle in an accident or damage or loss of your own vehicle due to an insured event.

Other forms of cover generally only cover drivers for the damage they cause to other people’s property, or damage or loss of their own vehicle in limited circumstances (usually fire and theft). Comprehensive cover generally extends to other risks on top of these, such as damage caused to your own car by extreme weather or in an accident.

In addition, a comprehensive policy may cover you for some of the other costs associated with an accident or other insured event. For example, depending on the policy, it may cover the cost of a replacement vehicle like a hire car while yours is being repaired or replaced, or some insurers may let you purchase this as an optional extra.

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This is a policy that covers damage to the property of others, and some limited cover for your own vehicle if it is damaged or lost because of fire or theft. It generally does not cover damage to your own car caused by a car accident.

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This is a policy that covers the cost of repairing damage caused by your vehicle to other people’s property, such as their car. It generally also covers your legal costs if they sue you over that damage. It does not cover damage to your own car, however.

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CTP is a compulsory car insurance policy that covers you if you injure or kill someone in a motor vehicle accident. The specific conditions on this type of cover are different from state to state, but no matter where you are, it is compulsory to hold CTP in order to register your vehicle.

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An excess is an amount of money you pay your insurer towards the cost of your claim. Different excesses might apply to different types of claims, so you should check your policy for details. You may be able to pay a lower premium if you agree to a higher excess, but you need to be sure that you could afford to pay the excess unexpectedly in an emergency.

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When taking out car insurance in New Zealand, the provider will generally ask whether the car has been damaged by hail in the past. If it has, this may limit the insurance you can take out. For example, according to Queensland-based insurer RACQ: “most insurers won’t cover vehicles with existing hail damage, or at best, they’ll limit the cover”.

It’s important to disclose up front with the insurer if your car has hail damage, as it may refuse to pay out on a claim if it later discovers the car was already damaged when the policy was taken out.

As long as your vehicle is eligible to be registered in Australia, you will be able to get CTP insurance, even if your car has existing hail damage.

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Market value car insurance is when your vehicle is insured for what it would be worth on the market, or what it would cost to replace it with another car of the same make, model, age, and condition that your vehicle was in before the loss or damage. This is one option for your sum insured; the other option is to insure your vehicle for an agreed amount (see ‘agreed value’ above). Market value policies tend to be cheaper than agreed value ones, but the amount your car is insured for may not be as high.

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While it offers a higher level of cover than other types of car insurance, a comprehensive car insurance policy still won’t cover all risks on the road. For example, below are some events and other exceptions that are generally not covered by car insurance.

  • Restricted drivers: For example, an accident where the driver of the insured vehicle does not have a licence or is otherwise not covered by the policy (e.g. some insurers charge a lower premium if you agree that your vehicle will not be driven by anyone under 25 years old, meaning cover wouldn’t extend to drivers under this age)
  • Driving under the influence of alcohol or drugs
  • Modifying your vehicle without notifying your insurer
  • Using your car for commercial reasons (unless you have disclosed this to your insurer and it has agreed to cover you for this kind of use)
  • Overloading your car with too many passengers or too large a load
  • Mechanical faults or gradual wear and tear to your vehicle
  • What does agreed value mean?
  • In car insurance, agreed value cover is where the amount a vehicle is insured for is fixed by agreement between the insurer and the policyholder. The other main option is to insure your vehicle for its market value (see ‘market value’ below).

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