When it comes to motor insurance in New Zealand, understanding your policy wording can feel like trying to read another language. We’re here to break it down into plain English so you can feel confident about what you’re paying for – and what to expect if you need to make a claim.

First up, there are three types of cover available

1. Comprehensive

• Covers: Damage to your vehicle (regardless of who’s at fault), theft, fire, accidental damage, and damage to other people’s property
• Best for: Newer or higher-value vehicles; offers the most protection

 

2. Third Party, Fire & Theft

• Covers:
  • Damage you cause to someone else’s vehicle or property (third party)
  • Fire damage to your car (some insurers include other natural disasters like earthquake or tsunami)
  • Theft or attempted theft
• Does NOT cover: Accidental damage to your own car
• Best for: Older cars that still have some value and you want protection against fire or theft

 

3. Third Party Only

• Covers only: Damage you cause to other people’s vehicles or property
• Does NOT cover: Damage to your own car (for any reason)
• Best for: Low-value vehicles where repair or replacement costs would be low or manageable

 

Comprehensive – what is and what’s NOT covered?

Most comprehensive motor vehicle policies in NZ cover:

• Accidental damage: If your car is damaged in a crash, whether you’re at fault or not
• Theft or attempted theft: If your car is stolen or someone tries to steal it
• Fire damage: If your vehicle is damaged or destroyed by fire or natural disaster like earthquake or tsunami.
• Vandalism: Deliberate damage by others
• Third-party liability: If you damage someone else’s vehicle or property, your insurer pays
• Windscreen/glass cover: Many policies offer this without affecting your no-claims bonus
• Towing and transport: If your car can’t be driven after an accident, your policy may cover towing costs – and getting you back home
• Replacement vehicle: Some policies provide a contribution for you to hire another car

 

What’s NOT covered – common exclusions:

Understanding what isn’t covered is just as important:

• Driving under the influence: If the driver is over the alcohol limit or under the influence of drugs – your claim could be denied
• Unlicensed driver: If the person driving doesn’t hold a valid driver’s licence – or operating outside the bounds of their licence. For example, a learner licenced driver operating without a full NZ licence holder in the vehicle, or a restricted licenced driver cruising late at night
• Unlawful use: If the vehicle is being used for illegal purposes
• Wear and tear: Damage from aging, rust, or poor maintenance is not covered (Insurance is not a warranty)
• Incorrect use of vehicle: Using a private car for business or rideshare without proper cover may void your policy
• Overloading or unroadworthy vehicle: Driving a vehicle that’s not roadworthy or carrying more than it’s designed for. A common example is towing more than the vehicle is rated for. Hint: Check the vehicle handbook or compliance plate for towing specs and make sure the towbar rating matches or exceeds the trailer weight.
• No Warrant of Fitness (WOF): Individually considered at time of claim. As a rule of thumb, if an incident occurred and the cause was also a reason your vehicle failed a WOF, it is likely a claim will be declined. Outside of those circumstances, a claim might still proceed – but it’s definitely not a situation you want to be in!

 

Do you use your vehicle for work? Commercial vs Private

Commercial Motor Insurance

• Purpose: Covers vehicles used for business or work purposes (e.g., delivery, transport or trades).
• Covers:
  • Business-related use and Private use
  • Anyone who is driving within the rules of their licence is covered on this policy
  • There is no named driver or excluding under 25-years drivers’ options
  • In a total loss accepted claim, you will receive ‘fair market value’. This may be different to your disclosed value on your policy, so it’s important to keep this up to date. Your broker can assist you here.
• Higher Risk = Higher Premiums: Due to greater time on the road and business use
• Rental vehicle / loss of use: To keep your business moving, options to hire a replacement vehicle when yours is off the road under an accepted claim

 

Private Motor Insurance

• Purpose: Covers vehicles used for personal use only (e.g., commuting, errands, recreation)
• Covers:
  • Social, domestic, and pleasure use
  • Driving to and from work
  • You can reduce your premium by choosing named drivers, or excluding drivers aged under 25 years
  • Can be ‘agreed value’ – depending on insurer – otherwise you will receive ‘fair market value’ for a total loss accepted claim
  • Options for classic, competition or restoration of vehicles – depending on insurer
• Lower Risk = Lower Premiums: Generally lower risk and less time on the road
• Strict Use Limits: Business use is not covered

 

Relax…

You’re not on your own – your broker is here to guide you through your options and recommend the best cover at the most competitive premium. If you have any questions or need clarification, don’t hesitate to get in touch anytime. We’re here to help!

(C) JenBro 2025