Not all policies are created equal!
Before you buy it always makes sense to shop around. So what should you consider when you need to buy third party car insurance? Our guide has been written to help point you in the direction of other companies to contact for quotes and also to alert you to hidden costs or extra fees that might be included in some policies.
Do you need short term third party insurance or comprehensive car insurance?
Third party car insurance, also known as liability car insurance, is designed for people who own a vehicle that has not cost them too much. Usually less than the $3,000 to $4,000 dollar mark.
This means your premium (the amount you pay for insurance) will be low but if you cause any damage to your vehicle it will not be covered.
Comprehensive Car Insurance will cover you for damage that you may cause to your car, campervan or motorbike , as well as to someone else’s car or property. As a consequence you will pay a higher premium than for third party insurance. The difference between these options could be up to $800 for 12 months coverage.
When you are comparing policies from different companies, we recommend keeping the following in mind:
Excess is key
The excess is the amount of money you will pay if you need to make a claim. Let’s say you crashed in to a parked Ferrari. Even a little dent might cost $5,000 to repair. So if the excess if $500, this means that you would pay this amount and the insurance company will pay for the remaining $4,500.
Location of the vehicle
Does the insurer require you to have a fixed address the car will be parked at
If you are buying your car to be touring New Zealand and are not too sure where the car will be located from day to day, then this is worth discussing when getting a quote. Travellers Car Insurance realises this and will not charge you more if you are parked in Auckland as opposed to a quiet street in a South Island town.
Some companies will also want to know if you will be parked on the street, in a garage or a driveway. This means in some cases you could be ringing up the insurance company regularly to let them know about your new location.
Will the insurer charge more if you do not have an alarm or immobiliser?
Many early model vehicles will not have an alarm or immobiliser and some insurance companies will charge you more if you do not have one. It will most likely cost you around $300-$400 to get a basic alarm installed in to your car if it doesn’t have one.
What is the insurers financial rating?
Research what the Insurer Financial Strength Rating is. Are you getting insurance with a trusted company. Standard and Poor’s puts out a rating from AAA (extremely strong) to CCC (very weak). It is worth finding out what the rating is of the car insurance company your are getting a quote from.
Do you pay more for having an international driver licence.
You will be asked what type of license you hold. This is so the insurance provider can ascertain how experienced as driver you are and if you have any restrictions on the license that you have. For example in New Zealand you can obtain your driver license at 16 years of age, but start with your Learner License. Restrictions on this license mean that you can not drive unless a supervisor (someone who has help a New Zealand driver license for at least two years) is sitting next to you in a the passenger seat). You must also display L plates in the vehicle so other drivers can see that you are learning to drive.
Convictions and driving offences
Be prepared to answer questions about your previous driving records. The most commonly asked questions will include:
• Been involved in any accidents (as a driver)
• Have you made any claims with previous policies you may have had
• Have you been convicted for any criminal offences
• Has your driver license suspended or disqualified
Is car insurance even compulsory in New Zealand?
No it is not. In some other countries it is compulsory, but in New Zealand it is ‘highly recommended’ but not legally required. New Zealand has the Accident Compensation Corporation (ACC) and this provides comprehensive personal injury cover for visitors to New Zealand. This means that in New Zealand you can not sue for personal injury. Keep in mind the ACC only covers treatment costs while you are in the country and would not cover travel costs to get you back to your home country if you are injured. This is why travel insurance is so important.
How to get an Insurance Quote Online?
Most companies now offer an online car insurance quote service. You may need to phone them (usually they will have a Freephone number) if you have questions, or they may need to you phone them to clarify certain details, which is most likely concerning your overseas license.
Online car insurance forms will ask for the make, model and year of car that you are looking to buy (or have bought) so if you do not know yet what you are buying and are simply trying to find out costs then you will need to select something you think you might buy.
Backpackerboard’s noticeboard area & Trade Me would be a useful place to head to get an idea of what other Backpackers are trying to sell to other travellers to New Zealand.
Travellers Car Insurance has:
A low excess of just $500 per claim
Doesn’t charge more for extra drivers
Doesn’t ask where your car will be parked
Doesn’t charge more if you have no alarm
Is underwritten by a company (QBE) that has an A+ Financial Rating
Won’t charge more because you have an overseas driver licence
Remember to check out our helpful Buying a Car in New Zealand Guide, for information and tips about car buying in New Zealand.