How to Choose the Right Car Insurance For Your Vehicle

Date Jun 1, 2020
Blog category car insurance
By Michael Speight
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When it comes to car insurance, for many of us, it’s just another bill that we don’t really like paying for. On the other hand, car insurance is something that we simply cannot afford to be without. Car insurance is essential for all types of vehicles - whether your vehicle is a few years old or a few decades old - as it will protect and cover you for any expenses in the event of an accident.

 

There are typically two levels of cover for insuring your vehicle - third party cover and full comprehensive cover. Third party insurance covers you for any damages made to other vehicles, and normally comes with an option to add on theft and fire cover. Full comprehensive cover will cover you for a number of events that could damage your vehicle. 

 

The price you pay for your car insurance will vary depending on a number of factors, such as the vehicle’s age, who will be driving the car, any modifications made and, of course, who you choose to take out insurance with. 

 

For those that are unsure of which type of vehicle insurance will work best for them, don’t fret! In this blog post, we discuss everything you may need to know about car insurance options and what kind of cover will suit you best.

Kiwi couple out on the roads covered by car insurance

Full comprehensive car insurance cover

If you’re looking for complete protection, security and reliability with your cover, full comprehensive car insurance is the ideal option for you. As well as covering the cost of damage to your own vehicle, full car insurance will cover the cost of damage to other people’s vehicles also.

 

Depending on which insurance provider you take out your policy with, full comprehensive car insurance will generally cover the following:

 

  • Accidental loss of vehicle
  • Accidental damage to vehicle
  • Theft and fire damage
  • Towing costs
  • Car contents
  • Earthquake
  • Lock and key replacement
  • Emergency transport and accommodation

 

Although you can expect ‘full cover’ with comprehensive insurance, some insurers offer optional additional cover that you can add to your policy. Optional extras include roadside assistance, rental vehicle cover and free glass/windscreen cover.

While many may question whether full comprehensive cover is worth it or not, ask yourself this question: if your car was totalled in an accident, could you easily afford to replace it? If you can’t afford to replace the cost of your vehicle, then you should definitely consider full car insurance.

 

Full comprehensive cover is probably more affordable than you think, especially when you consider the cost to replace a whole vehicle. The exact cost of full cover will depend on your driver’s licence type, the make and model or your vehicle and other factors determined by your car insurance company. 

 

The average cost per year to fully insure your car is around $675, and you may be eligible for multiple policy discounts if you have other policies with the same insurance company.

 

Third party car insurance cover

Third party insurance is considered to be a very basic policy, suited to those who are on a budget with their car insurance. The idea of third party insurance is that it’s not so much about protecting your car; instead, it’s there to protect yourself in the event that you damage someone else’s car or property.

 

Once again, it’ll depend on your chosen insurer as to what your third party policy will cover; however, most general policies include:

 

  • Towing costs
  • Legal liability protection and cover
  • Road clearing costs
  • Uninsured driver protection

 

If you’re thinking of taking out third party cover, remember that there is no cover for your own vehicle if you’re in an accident which you caused. So in the event of a car accident where you were at fault, you would be responsible for the costs involved with replacing or repairing your own vehicle.

 

This is the reason why many people choose to get full comprehensive insurance, as not many can come up with thousands of dollars on the spot to repair or replace a car! Third party car insurance is better suited to drivers with low value cars, where it would be more expensive to repair the car than it would be to replace it entirely.

 

Because there is undoubtedly less cover with third party, the cost is significantly less than what you’d pay for comprehensive insurance. Depending on your vehicle and driver details, you can expect to pay around $150 a year for third party cover.

 

Third party car insurance with fire and theft cover

For those that are after a little bit more cover than a standard third party policy, you may want to consider taking out third party insurance with fire and theft cover. Third party with fire and theft cover gives you the same benefits as standard third party cover, but with the addition of cover for fire and theft.

Generally, most car insurers will also offer optional extras with this type of cover as well, such as claim free window and glass repairs, roadside assistance and rental vehicle cover.

You can expect to pay around double the price of third party cover to include fire and theft, with prices averaging around $300 per year.

You never know what might happen to your car and in the event of a fire or theft having car insurance will give you peace of mind that you will be covered for it. To reduce the likelihood of theft, car makers are now are now making a large effort to prevent keyless theft by installing advanced security systems, so hopefully this will see a decrease in the amount of car theft. 

 

Car insurance FAQ

What will my vehicle be insured for?

Most car insurance companies will give you 1 of 2 options when you first sign up for cover. You’ll either be offered cover for ‘market value’ - where a reasonable cost is determined when a claim is made - or ‘agreed value’ - which is a specific amount that you nominate when you initially take out insurance.

 

Is my modified vehicle covered?

There are many insurers that will happily cover modified vehicles - however, it will depend on the type of accessories and modifications you have. These can include:

  • Engine (turbo, tuning, replacement etc)
  • Disability modifications (ramps, lifts etc)
  • Suspension (raised or lowered)
  • Exhaust

Be sure to tell your chosen insurer about any modifications your car has prior to signing up for cover. Failure to do so can void your policy altogether when you go to make a claim.

 

Is roadside assistance included as part of my cover?

This will depend on the type of cover you have and your chosen insurance company. With full car insurance, most policies include a 24/7 roadside service. Third party doesn’t normally include this, however you can generally add this on as an optional extra for a small cost.

 

Do all drivers need to be listed on my policy?

Nowadays, most car insurance policies include an automatic open driver cover; any drivers over the age of 25 who have a full NZ driver’s licence are generally automatically covered (given they’ve had no criminal convictions or DUIs). Any drivers under the age of 25 should be listed on your insurance policy.

 

How can I reduce my car insurance costs?

There are quite a few options for how you can save money on car insurance. For example, if you have more than one insurance policy - i.e. home and contents, life, medical etc - if you take out all your policies with the same insurer, you’ll likely qualify for a multiple policy discount.

 

Are my kids covered under my policy?

Do your kids regularly drive your vehicle? If so, it’s important that they are added onto your insurance policy. The rules around this does vary depending on your insurance company, however, it’s always better to be safe than sorry!

 

If your kids are over 25 with a full driver’s licence, they are usually automatically covered under a full comprehensive car policy. Those who are under 25 need to be listed under the policy, to ensure that your insurance cover is still valid if they are driving and involved in an accident.

 

Find the best car insurance deal with Compare Bear

Now that you’ve got an idea about which type of insurance is best for your needs and budget, you can start the process to finding a great value car insurance deal.

 

Here at Compare Bear, we’ve made it easy for you to find and compare the latest car insurance policies around. We’ve got all of the latest deals from New Zealand’s top car insurance companies right here!

 

You can enjoy some fantastic benefits when you sign up for car insurance. Insurers such as Protecta and Cove are currently giving away some amazing sign up deals when you take out insurance with them…

 

Sign up with Cove and you’ll get your first month of full comprehensive car insurance for FREE! Sign up with Protecta and you’ll enjoy $30 off your annual premiums with either third party or full cover!

 

Head on over to our car comparison tool and get started on finding the best car insurance deal for you. It’s easy, free, and only takes a few minutes to find the best deals around.

About the author
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Michael Speight

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