Best car insurance in New Zealand in 2025

Did you know that in New Zealand, while third-party car insurance is not legally required, every year thousands of drivers are left facing repair costs and liability bills that can reach tens of thousands of dollars after an accident? Even minor collisions or acts of vandalism can add up quickly, placing significant financial strain on vehicle owners who are unprotected. The most frequent risks here include collisions, weather damage, and theft—not to mention the high rates of uninsured drivers on our roads.

Unlike comprehensive policies, the most basic insurance may not cover damage to your own vehicle or loss from natural disasters, which leaves you exposed in many real-world scenarios. Comparing car insurance policies is crucial, as there are substantial differences in what’s covered, policy exclusions, costs, and claim processes across providers. Selecting the right policy helps you avoid unexpected costs, ensures you’re protected in situations that matter most, and can make a big difference if you ever need to claim.

At HelloSafe, our mission is to empower New Zealand drivers with independent and expert comparisons, offering up-to-date insights, transparent comparisons, and practical advice—so you can confidently find the policy that best fits your needs and budget.

How does car insurance work in New Zealand?

Car insurance in New Zealand is a voluntary protection that covers drivers for damage they cause to others, and—depending on the policy—also for damage or loss to their own vehicle from accidents, theft, or natural disasters. Policies are offered by private insurers with options ranging from basic third-party liability to full comprehensive cover, so drivers can choose the level of protection that matches their situation.

While not compulsory except in rare cases, taking out car insurance gives peace of mind and helps you avoid massive out-of-pocket expenses after an incident. There is a wide range of options in NZ, from affordable plans that meet only legal responsibility to full-cover policies that factor in your budget, driving habits, and whether you need coverage for international travel. Flexible reimbursement levels, customisable add-ons, and access to specialist plans make it easy for every driver to find a policy that fits.

What does car insurance cover?

Car insurance in New Zealand usually includes basic legal cover, known as third-party insurance, which protects you if you damage someone else’s property or injure others but does not cover your own vehicle. Many insurers offer optional additions, such as fire and theft cover, or full comprehensive plans that protect against accidental damage, theft, fire, vandalism, natural disasters, and more. Optional add-ons can include roadside assistance, windscreen repairs, rental reimbursement, gap insurance, and coverage for custom or rideshare vehicles. Reimbursement is generally subject to your policy limits and the type of incident, with deductibles (excess) applied before your insurer pays out. Some benefits or add-ons may have a short waiting period before you can claim.

What is typically not covered by car insurance?

The most common car insurance exclusions in New Zealand generally include intentional damage done by the policyholder, costs related to regular maintenance or wear and tear, and incidents occurring while driving under the influence of alcohol or drugs. Personal belongings inside the car are typically not covered unless specifically added to the policy. Claims may be denied if the car is driven by someone not named or authorised on the policy, or if policy limits are exceeded. Other frequent exclusions include damage resulting from illegal use, racing, or using the vehicle outside agreed terms. Waiting periods or coverage limits may apply for certain benefits, and always check your individual policy for details.

How much does car insurance cost in New Zealand?

Car insurance pricing in New Zealand is influenced by several factors, including the driver’s age, driving history, type of coverage selected (such as third party, third party fire and theft, or comprehensive), and the amount of excess (deductible) you choose. Your vehicle’s make, model, age, and safety features also affect premiums, as do your annual mileage and where you live—urban areas or regions with higher crime or accident rates usually attract higher premiums. Adding extra coverage options, insuring newer, high-value, or high-performance vehicles, or listing young or inexperienced drivers on your policy will typically increase your monthly cost. Premiums may also rise following at-fault accidents, traffic violations, claims history, and as you age past a certain point; even smaller at-fault claims can trigger significant hikes on renewal.

Best car insurance policies in New Zealand

Best for everyday commuting (school/work)

AMI “Comprehensive” car insurance is a strong choice for daily commuters, offering cover for accidental damage to your car and others, fire, theft, and third-party liability. It also includes roadside assistance and covers up to NZ$20 million in legal liability. This plan is suitable for commuters due to its broad protection, rapid claims response, and optional extras that support seamless mobility between home, work, and school.

Best for families with multiple vehicles

State Insurance’s “Multi-policy Discount” with “Comprehensive” car insurance is ideal for families insuring several vehicles. Each vehicle receives comprehensive cover (accident, theft, natural events, liability) and families benefit from bundled policy discounts, simplifying management and reducing annual costs. Generous reimbursement limits and add-ons such as roadside rescue or courtesy car ensure family transport needs are always covered.

Best for tight budgets

AA Insurance “Third Party, Fire & Theft” offers core protection at an affordable monthly price, covering your liability to others, car theft, and fire damage (up to market value), but excludes collision damage to your own car. It is suitable for cost-sensitive drivers who want essential peace of mind and the support of a major NZ brand.

Best for expats or international drivers

Tower Insurance’s “SmartDriver” package accommodates international licenses and drivers with limited local history, providing comprehensive cover (accidental loss, fire, theft, third party liability up to NZ$20 million) and flexible excess options. This plan is designed for new arrivals to New Zealand seeking straightforward acceptance, support, and digital claims in English.

Best for senior drivers

AMI “Full Cover—Seniors” tailors car insurance for older drivers, recognising their safer driving records and offering lower excess, a no-claims bonus, and optional windscreen repair without affecting claims history. It provides full protection for accidents, theft, and liability, making it attractive for retirees wanting security and premium stability.

Best for students or young drivers

Youi “Comprehensive—Young Driver” policy features usage-based pricing, flexible excess, accident forgiveness, and discounts for low annual mileage. It provides full cover against accidental damage, third-party risks, and includes optional roadside assistance. This suits students with varied driving habits and a focus on cost-efficiency.

Best for electric/hybrid vehicle owners

AA Insurance “Comprehensive EV/Hybrid” car insurance includes all standard comprehensive benefits and extends to battery protection, charging cable cover, and 24/7 breakdown assistance. Reimbursement for loss or damage is up to the vehicle’s market value, ensuring EV owners get coverage tailored to modern, sustainable vehicles.

How to lower the cost of your car insurance?

Proven ways to lower your car insurance premiums in New Zealand:

• Compare offers: Use our HelloSafe comparison tool at the top of the page to quickly compare policies and find the most affordable option for your needs.
• Increase your excess: Choosing a higher excess (the amount you pay if you make a claim) can lower your regular premium, but ensure it's an amount you could comfortably pay in case of an accident.
• Maintain a good driving record: Safe, claim-free driving will often qualify you for a no-claims discount, leading to lower premiums over time.
• Bundle insurance policies: Purchasing your car insurance together with home or contents insurance from the same provider can entitle you to a valuable multi-policy discount.
• Limit your mileage: Some insurers offer lower rates to drivers with low annual mileage, so updating your insurer as your driving habits change can save money.
• Choose your vehicle wisely: Cars with strong safety features and lower repair costs are often cheaper to insure, so keep insurance implications in mind when selecting your next vehicle.
• Park securely: Keeping your car in a garage or a secure, off-street spot can reduce your risk profile and may result in a lower premium.
• Review your policy annually: Regularly checking that your cover matches your current situation helps ensure you’re not paying for features you no longer need.

FAQ

Emma Walker

Personal finance writer

Emma is a New Zealand-based writer and editor with a focus on personal finance and everyday money decisions. She holds a Bachelor of Commerce from the University of Auckland and completed postgraduate studies in Financial Literacy and Consumer Behaviour at Victoria University of Wellington. Before joining HelloSafe, Emma worked in publishing and digital media, producing educational content to help Kiwis navigate loans, insurance, saving, and budgeting tools. At HelloSafe, Emma delivers practical, reader-first content tailored to New Zealanders—always with the goal of making financial topics easier to understand and act on.