Shopping for car insurance can be overwhelming, but finding the right policy at the best price is worth the effort.
When shopping around, you may be tempted to simply go for the cheapest policy you can find, but it’s vital to keep in mind the level of coverage you are getting for that money; often, spending a bit more gets you a better deal and offers superior protection.
Whether you're buying a new policy or renewing an existing one, following a strategic approach can help you save money while ensuring you have the right coverage.
Compare multiple quotes
Prices and coverage options can vary significantly between insurers, so it’s essential to request quotes from different insurance providers. Online comparison tools can help streamline the process, but it’s also beneficial to contact insurance companies directly for personalised options.
Understand the different types
There are several types of car insurance, each serving a different purpose. Understanding them will help you determine the best policy for your needs.
“Third-party” is the most basic and affordable type. It covers damage you cause to other people’s vehicles or property but does not cover your own car, although some insurers offer a degree of coverage for damage caused to your vehicle by uninsured drivers. This is a popular choice for those driving older or lower-value cars.
“Third-Party, Fire and Theft” includes third-party coverage but also provides protection against fire damage and theft of your vehicle. It’s a good option for those who want more protection without paying for full comprehensive insurance.
“Comprehensive” is the highest level of coverage and provides protection for both your car and other people’s property. It covers accident-related damage, fire, theft, vandalism, and weather-related events such as floods and storms. If you have a financed vehicle, lenders often require this coverage.
Look for discounts
Insurance is a competitive business just like any other, and many companies offer discounts that can lower your premium.
Common ones include multi-policy discounts when bundling car insurance with home or contents insurance. Safe driver discounts can apply to those with a clean driving history, and low-mileage discounts can be available for those who drive fewer kilometres annually.
If your vehicle has anti-theft devices, you may qualify for additional savings. Some insurers also offer discounts if you pay your premium annually instead of monthly.
Check the extras
Most insurance companies will offer optional extras like excess-free glass coverage, hire car cost coverage, roadside rescue and trailer coverage, but often some of these will be bundled in as part of your plan. Pay attention to these when comparing policies, as some of them could represent a big saving.
Understand excess and premiums
Excess is the amount you pay out of your own pocket before insurance covers the rest. A higher excess lowers your premium but increases your costs in a claim, while a lower excess means higher premiums but reduces out-of-pocket expenses in case of an accident. Finding the right balance is key to managing your insurance costs effectively.
Research the insurer’s reputation
Not all insurance companies offer the same level of service. Check customer reviews and ratings on platforms like Canstar, Consumer NZ, or insurer-specific reviews. Look into the insurer’s claim settlement ratio - the higher it is, the smoother the claims process tends to be. Good customer service and responsiveness are also crucial factors to consider.
Ask about policy flexibility
Before committing to a policy, ask if you can adjust coverage mid-term, add or remove drivers easily, or if there are penalties for early cancellation. It’s also helpful to understand renewal policies and potential rate increases.
Read the fine print
Carefully review your policy’s exclusions and limitations to avoid surprises. Pay attention to coverage limits, claim procedures, and any additional fees or hidden costs. Some policies may exclude drivers under a certain age or have restrictions on vehicle modifications. Knowing these details in advance can save you frustration later.
Shopping for car insurance doesn’t have to be stressful. By comparing multiple quotes, understanding your coverage needs, taking advantage of discounts, and researching insurers, you can find a policy that provides the best protection at an affordable price. Review the fine print and ask questions to ensure there are no surprises when you need to file a claim.