Car insurance is not mandatory in New Zealand. But if you decide to not have any, you risk paying astronomical amounts after a possible accident. Therefore we strongly recommend having some. For budget traveling the most reasonable option is Third Party insurance, which is, insurance which covers damages on the other person’s car. You never know which car you crash with. It may be really expensive so it is better to have peace on your mind and pay for some basic insurance which will save you from the big trouble.
You can choose from several basic options for insurance.
Basic insurance options
- COMPREHENSIVE CAR INSURANCE
With this insurance, you are covered in the total amount of the contracted amount in the case of the accident. It means that not just the other person will be compensated by money corresponding to the damage, but you do too. This insurance is the most expensive but also the safest option. It also offers additional services such as free tooth extraction, theft insurance, fire insurance, etc. The price of this insurance is quite high so it might not be necessary for your camper car. It obviously depends on how much you paid for your vehicle (usually an old backpacker's car).
- THIRD PARTY CAR INSURANCE
Insurance that provides financial compensation to the damaged counterparty (only up to the agreed maximum coverage), but you will not be compensated for damage on your car. With this policy, you have the option to agree on a certain amount of co-payment. Of course, the final price will depend on that. So the lower the level of participation, the more expensive the insurance company. Since the insurance policy in New Zealand is not mandatory, many tourists and locals are taking the risk.
But do you really have enough money, experience, and energy to afford not having insurance? Is it really worth not investing a tens of dollars a month? It is up to you, of course, but if you opt for certainty and you pay at least this basic amount, in case you are involved in an accident with an uninsured driver who and they think you’re to blame, your insurance company pays you compensation.
- THIRD PARTY, FIRE & THEFT
This insurance is a kind of superstructure of a basic third party, which also includes theft insurance and fire insurance. You can also opt for windscreen damage insurance. This option is worth considering, especially if you travel along the rocky roads of the southern island. Another fact to consider is that for many of you, the car is also your home and the biggest investment upon arrival. If it gets stolen, you have nothing. If it breaks down and takes a few days to get fixed then you do not have a roof above your head.
What to pay attention for
- VEHICLE ADDRESS
We would like to inform you that if you want to arrange for new insurance the price might also change depending on the place where the car usually stays. There is a special question about where you usually park your vehicle. A bigger the city means a higher the chance of an accident which also means a higher price of insurance.
- ANOTHER DRIVER
The insurance contract you sign is signed on the name of a certain person. If the car is driven by another person in the event of an accident it is automatically covered, but different insurance terms may be applied in their case. Always verify this for sure. If you know that you will share the wheel with someone else, consider including them in the contract.
- AGREED VALUE
When you enter a car price, think about how much you paid for as the absolute value of the car (which you would be reimbursed in the event of theft/ complete destruction). The absolute price will obviously affect the height of your monthly payments. With AA Insurance, the final payment will pop up immediately when the amount is overwritten. So you can play the system to set it on the amount that works best for you. Likewise, you can set whether you want to pay a yearly, monthly, or daily.
When selecting a policy, you can choose the amount of participation, the amount up to which you will cover the damage by yourself. Anything above that limit will be paid by the insurance company (up to the agreed maximum value).
- Person under the age of 25 –applies to the age of the driver at the time of the accident, NOT the name of the person on whose name the contract is written.
- Inexperienced driver - a driver who has caused an accident before has had a driving license for a period shorter than two years may have to pay higher amounts.
- LENGTH OF INSURANCE
Most local insurers do not insure for periods under one year. If you’re looking for shorter insurance coverage than you should find one of the companies specializing in tourists, but of course that’s more expensive.
The biggest insurance company is AA Insurance, which, in its size and reliability, is looking at hardly any competition. But of course, there are many other smaller companies. Study the terms of each one closely and choose one that best fits your individual needs.
And one more tip at the end. Most large insurance companies are relatively flexible, and the level of insurance can change with a single phone call, immediately adjusting the amount of money.