Understanding Car Insurance in NZ

Understanding Car Insurance in NZ

Unlike in the UK, Europe and most of the rest of the world, car insurance in NZ is not compulsory. It is at the discretion of the owner of the car on whether or not to obtain car insurance. However, with this discretion, comes exposure to liabilities in case of accidents. The owner stands to lose not only their vehicle, if badly damaged, but also has to compensate for any third party damage to property.
The ACC and Rego
A keen eye may have noted that the liability, in case of accidents, does not extend to personal injuries but is limited to property damage. This is because of the ACC (Accident Compensation Corporation). In place of compulsory car insurance, New Zealand has a novel system where they utilize the vehicle registration fee, paid on purchase. A major percentage of the vehicle registration fee, or Rego as it is fondly known, is remitted to the ACC. This fund then takes care of any personal injury and support in case of accident, thereby largely eliminating the need for Youi Car Insurance in NZ.
Types of Car Insurance in NZ
Medical care and injury compensation is one of the largest components of the costs associated with car insurance. Having eliminated it through the ACC, the New Zealand government has effectively subsidized individual car owners making car ownership accessible due to low insurance premiums. Consequently, many car owners now opt for either comprehensive car insurance in New Zealand or at the very least, third party car insurance. In addition to the third party and comprehensive covers, one can obtain third party fire and theft car insurance. Short-term car insurance in NZ, are also available.
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Purchase of Car Insurance in New Zealand
By eliminating a key component of any car insurance contract, the government has smoothed the entire process of purchasing car insurance in NZ. Due to reduced variables, the requirements for obtaining a cover are simple and straightforward. Most insurance companies will ask some few basic questions before issuing a quote online. A simple email or phone call will then seal the deal.
No Claims Discounts or Bonuses on Car Insurance in NZ
The good news in relation to car insurance in New Zealand appears to never end. No claim discounts or bonuses earned in the USA or UK are transferrable to new car insurance in NZ. The insurance companies, in doing this, acknowledge that all ones driving history should factor, while assessing ones risk profile. Additionally, they acknowledge the close relationships New Zealand has with the old colonial master and its bigger cousin.
However, there is a slight disclaimer on the positive news. Although the law allows one to drive in New Zealand for up to a year with a UK or international driver’s license, the insurance companies are not as welcoming. Most insurance companies will not provide car insurance in New Zealand to individuals lacking a New Zealand driving license. Those that do, will bump up the premiums by as much as $100. Depending on how long one intends to stay in New Zealand, one may be better served by simply obtaining a New Zealand driving license.
Auckland
Auckland, the former capital city of New Zealand, attracts higher insurance premiums than the rest of New Zealand. This is because approximately a third of the country is compacted in this small city. Given this heavy concentration of human and automobile traffic, most individuals would advice that car insurance be obtained when driving in Auckland.
The insurancescenario is a heaven for any car owner and petrol head. The ability to obtain coverage at very low and affordable prices means that many have the chance to invest in the acquisition of better vehicles and to their maintenance. With the combined security of the ACC and affordable car insurance in New Zealand, driving is truly heavenly.

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