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What is motor vehicle insurance?

Motor insurance can cover your motor vehicle against accidental damage and theft. It can also protect you from the financial costs of repairing or replacing another person’s vehicle in an accident where you’re at fault. Generally choose to insure your car for an agreed amount, or for the market value of your vehicle.

Who should consider it?

Many of us need a motor vehicle to get from place to place, so we all know how useful they can be while also recognizing the fact that driving a motor vehicle is dangerous. You might be careful in obeying traffic laws, but you never know when someone else will not and be the cause of an accident that involves you. Then again, mistakes do happen and you never know when something may occur where you will be at fault. This is why it is important to have motor vehicle insurance.

However, motor vehicle insurance covers much more than just collisions. There are times when certain acts of nature may occur such as a hail storm or a falling tree, that may cause damage and the cost fix it could be expensive.


Theft of vehicles and theft from vehicles are the two most common crime types in New Zealand.

Neighbourhood Support New Zealand, 2018

Comprehensive Full Cover

Comprehensive full cover – can cover the costs you may be liable to pay if you are at fault and damage or write off someone else’s car or property, as well as your own car. Having comprehensive motor insurance helps to pay for repairs – or can replace it all together if your car is written off. If your car is stolen, comprehensive motor insurance can pay you the agreed or market value, so you can buy another car.

Third Party Fire & Theft

Third party fire and theft – can cover the costs you may be liable to pay if you are at fault and damage or write off someone else’s car or property – and fire and theft damage to your own car – good but limited cover.

Third Party Only

Third party only – can cover the costs you may be liable to pay if you are at fault and damage or write off someone else’s car or property – the most basic cover, protecting you for your legal liability. If you only have this cover, there’s no cover for any damage to your own car.


31,591 motor vehicles were stolen or illegally used in the year to Jan 2020.

(New Zealand Police, ‘Crime in NZ at a Glance’, 2020)


The number of vehicle crashes recorded in New Zealand in 2016.

(Te Manatu Waka, Motor Vehicle Crashes in NZ 2017)


$1,159,798,847 claims were paid in 2019 for private and commercial vehicles.

(Insurance Council of NZ, Annual Review, 2019)

What can it cover?

The exact cover you can receive depends on the policy that you take out. But to give you an idea, here are some of the benefits a motor insurance policy may include:

Potential benefits
Cover to help repair or replace your vehicle if it’s damaged or stolen. Temporary accommodation if you cannot complete your journey following an accident.
Cover to help you pay for damage you cause to another person’s vehicle. No excess payable if you can identify the third party who were
completely at fault.
A replacement of the same make and model if your new vehicle is written off. An automatic 30 days’ cover on replacement vehicles and up to $100,000.
Choice of your own repairer or one from our preferred repairer panel. Up to $20 million of legal liability cover.
Repair guarantee for materials and workmanship on authorised repairs. The option to include one excess free windscreen claim per year.
Re-keying and re-coding of vehicle keys if they are stolen. The option to include hire car cover following an accident or if

What usually isn't covered?

Each policy is different, but generally you won’t be covered if:

    • Being driven by an unlicensed driver.
    • Being driven by you or any other person while under the influence of any drug or alcohol.
    • Being used in any motor sport or time trial.

There are other exclusions which we can outline for you. In addition, there is a deductible (or excess), and limits of liability (or sum insured).

Case Study

On her way home from work, Sylvia was involved in a minor accident with a SUV, which was her fault. While the other car had a minor scratch, her car had some serious damage.

After pulling over, Sylvia contacted her insurance broker who took some details and arranged for her car to be towed and assessed. Because her policy also contained a rental car inclusion, they helped Sylvia arrange a hire car so that she could get to work while her car was off the road.

An assessor contacted her the next day, letting her know that her car could be fixed and that her insurance would cover the cost. They arranged to have it repaired at her smash repairer of choice. While she was waiting for her car to be repaired, Sylvia had access to the rental car – with the cost also covered by her policy.

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