All about Car Insurance in New Zealand.
CAR INSURANCE IN NEW ZEALAND
Insurance provides security against accidental damage, loss or theft of a vehicle. In New Zealand, car insurance is handled a little differently from other countries. Getting a car insured is not a legal requirement. In some accident cases, the other party may not even be insured!
Some insurance plans are designed to cover costs incurred in such cases. What you and your car are insured against depends entirely on the insurance plan you are subscribed to, and whether you have taken reasonable care to avoid accidents and damage or theft and loss.
Types of Car Insurance in New Zealand
There are three basic types of car insurance plans in New Zealand that offer different types and levels of protection and insurance. The third party referred to insurance policies is the one against whom the insurance policy is taken out. It could be an individual, group of individuals or even an organization.
The second party is the insurance company that provides the insurance cover.
The first party in this case is you, the owner of the insurance policy who requires insurance against a third party.
Comprehensive or Full Insurance:
This may also be known as a standard insurance policy. This type of policy is the one with the broadest cover for the insured. For this reason, it is generally the most expensive insurance policy one can buy. Some things it may cover include damage to the vehicle insured by the owner and protection against theft or accidental loss. The insured is covered regardless of whose fault the accident, damage, theft or loss is. This policy often also may cover related costs, for instance, that of salvaging vehicles at the scene of the accident and getting them to an approved repair shop. However, it is advised that you avoid getting your vehicle repaired before it is surveyed by the insurers.
Third Party, Fire & Theft:
For those who wish to be insured against loss, damage, theft and fire to their car, this policy costs less than the premium comprehensive insurance policy but covers all the important bases. The car is protected against damage or loss, and also against theft and or fire, which sometimes go hand in hand. If your car is a model or make popularly targeted by thieves, you may want to take out this insurance policy on it for protection. Thieves are known to either take the car, dismantle it and sell its parts, or for taking the car for a joyride, after which they may burn the car to eliminate any forensic evidence that could identify them.
Third Party Property:
This is the most basic and also the cheapest insurance policy you can buy for yourself. In New Zealand, a third party property insurance policy only provides insurance cover against damage by the first party against a third party’s property. It does not cover any damage done to your own property by a third party. If your own vehicle is a low-value vehicle and its costs can be easily covered by you, this insurance policy is for you. There is always the possibility that you may want to cover damage caused to a high value vehicle by your policy in the event of an accident.
Vehicle Valuation
It is imperative to know the different ways your vehicle is valued according to the wording of an insurance policy. In New Zealand, there are two basic methods of automobile valuation.
Agreed Value: The agreed value refers to the monetary value of the vehicle that is agreed upon by both the second party (the insurer) and the first party (the insured). It is agreed upon prior to the commencement of the insurance period. The agreed value is normally the amount of money the second party will pay to the first party in the event that the vehicle is completely written off, less the excess amount.
Market Value: The market value refers to the market value of the car prior to the damage caused by the third party. This is generally determined by a surveyor or insurance assessor. It makes sense for you to reassess the market value for your insurance policy prior to policy renewal, so that you avoid paying in excess.
Insurance provides security against accidental damage, loss or theft of a vehicle. In New Zealand, car insurance is handled a little differently from other countries. Getting a car insured is not a legal requirement. In some accident cases, the other party may not even be insured!
Some insurance plans are designed to cover costs incurred in such cases. What you and your car are insured against depends entirely on the insurance plan you are subscribed to, and whether you have taken reasonable care to avoid accidents and damage or theft and loss.
Types of Car Insurance in New Zealand
There are three basic types of car insurance plans in New Zealand that offer different types and levels of protection and insurance. The third party referred to insurance policies is the one against whom the insurance policy is taken out. It could be an individual, group of individuals or even an organization.
The second party is the insurance company that provides the insurance cover.
The first party in this case is you, the owner of the insurance policy who requires insurance against a third party.
Comprehensive or Full Insurance:
This may also be known as a standard insurance policy. This type of policy is the one with the broadest cover for the insured. For this reason, it is generally the most expensive insurance policy one can buy. Some things it may cover include damage to the vehicle insured by the owner and protection against theft or accidental loss. The insured is covered regardless of whose fault the accident, damage, theft or loss is. This policy often also may cover related costs, for instance, that of salvaging vehicles at the scene of the accident and getting them to an approved repair shop. However, it is advised that you avoid getting your vehicle repaired before it is surveyed by the insurers.
Third Party, Fire & Theft:
For those who wish to be insured against loss, damage, theft and fire to their car, this policy costs less than the premium comprehensive insurance policy but covers all the important bases. The car is protected against damage or loss, and also against theft and or fire, which sometimes go hand in hand. If your car is a model or make popularly targeted by thieves, you may want to take out this insurance policy on it for protection. Thieves are known to either take the car, dismantle it and sell its parts, or for taking the car for a joyride, after which they may burn the car to eliminate any forensic evidence that could identify them.
Third Party Property:
This is the most basic and also the cheapest insurance policy you can buy for yourself. In New Zealand, a third party property insurance policy only provides insurance cover against damage by the first party against a third party’s property. It does not cover any damage done to your own property by a third party. If your own vehicle is a low-value vehicle and its costs can be easily covered by you, this insurance policy is for you. There is always the possibility that you may want to cover damage caused to a high value vehicle by your policy in the event of an accident.
Vehicle Valuation
It is imperative to know the different ways your vehicle is valued according to the wording of an insurance policy. In New Zealand, there are two basic methods of automobile valuation.
Agreed Value: The agreed value refers to the monetary value of the vehicle that is agreed upon by both the second party (the insurer) and the first party (the insured). It is agreed upon prior to the commencement of the insurance period. The agreed value is normally the amount of money the second party will pay to the first party in the event that the vehicle is completely written off, less the excess amount.
Market Value: The market value refers to the market value of the car prior to the damage caused by the third party. This is generally determined by a surveyor or insurance assessor. It makes sense for you to reassess the market value for your insurance policy prior to policy renewal, so that you avoid paying in excess.