The ins-and-outs of car insurance in New Zealand

About cars, insurance and learner drivers in NZ

If you find yourself scratching your head over the complexities of motor vehicle insurance, you’re not alone. However, making sure that you have the correct ‘nominations’ and details correct on your policy is essential if you don’t want to find yourself out of pocket when something does go wrong.

Car insurance is really simple with the biggest cost variations being around the age and driving history of the driver and the demographic region where the car will be kept. Vehicle insurance can be summed up as;

  • Comprehensive insurance;
  • Third party, fire and theft insurance; and
  • Third party.

1. Vehicle insurance for drivers over 25 years of age

If you and any drivers of the car are over 25 years of age, then this is your category. Your basic excess will be around the $300-$400 mark (depending on the Insurer). Nominating over 25 year old drivers and excluding under 25 year old drivers will generally trigger the most discounts and reduce the cost.

b. Open driver insurance:

If you are the nominated driver, you can opt for an open driver insurance policy if, for example, your children are learning to drive or using the vehicle from time-to-time. In this case, the premium remains the same, but there will be an additional excess if the under 25 year old driver has an accident.

Notify your insurer and change your policy if your children have started learning to drive using the vehicle.

2. Vehicle insurance as it applies to an under-25-year-old MAIN driver

If you are the main driver and aged under 25, your premiums won’t generally be pretty and in some instances, insurers may even decline to insure the specific car! For example, a 17 year old main driver of a turbo Subaru may battle to get insurance with most of the main insurers.

Most drivers in this category, will opt for third party, fire and theft vehicle insurance because the premiums can be horrendous. As an example, $180 or more a month for a car on full/comprehensive insurance (and an excess around the $1,000 mark), compared to third party, fire & theft insurance premiums starting at about $40 per month.

And that’s the sum of a very brief outline on how car insurance works.

The thing that catches a lot of people happens when their children start learning to drive. Ordinarily owners will be paying comprehensive car insurance for over-25s, and forget to shift to an ‘open driver policy’ when their kids start taking driving lessons.

Keeping your vehicle safe is all about being aware, on the road and on the insurance front.

Note to parents: Make sure that you do not nominate yourself as the main driver when in fact your under 25-year-old son or daughter is the regular driver. The insurance companies do investigate and they do come down hard on people who try to outsmart the system.

Photo: PBy Amos Bar-Zeev,

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