The cost of car insurance is a hot topic in New Zealand, especially when a policy comes up for renewal. We get it - no one wants to pay an arm and a leg for it. So, it's important to weigh up your options when you choose car insurance, taking into consideration the cost, types of cover available, and any key benefits you need. Let's break down what goes into the cost of car insurance and what you can do to save on your premium with Tower.
How much is car insurance?
There's no set standard for car insurance costs in New Zealand. The cost varies from insurer to insurer, and these costs are affected by a number of factors. It's a good idea to get a couple of quotes from different insurers - at Tower, it's quick and easy to get a quote online.
Factors that affect car insurance costs
Each insurer has their own criteria for pricing. They may include:
Vehicle-related factors
The type of car you drive and its value both play a part in how insurers price your premium. The make or model of the car you drive may experience a higher or lower frequency of claims and/or theft, or its repair costs may be different to other types of cars.
Some insurers may not cover certain types of cars at all, as they consider them too high risk.
Driver-related factors
Your location may be higher or lower risk due the frequency of crime-related claims and/or data available regarding natural hazards. Your claims history also plays a role in the cost of your car insurance.
Policy-related factors
Factors such as choosing an agreed or market value policy, any named drivers, your chosen excess, and any discounts may also affect your premium.
Find out more about understanding your car insurance premium.
Car insurance costs by age group
Your age can also have an impact on the cost of your insurance.
Young drivers
Drivers under 25 years old are at higher risk of accidents - in fact 30% of serious crashes involve a young driver, yet they only make up 13% of drivers in New Zealand.1 Because of this, if you're an under 25 driver, you'll find that your premium is the highest at this time.
Middle-aged drivers
If you're between 30-60 years old, have a few decades of driving under your belt, a clean driving record, and no major claims, you're probably considered a safe driver, and your insurer will take this account when pricing your premium.
Senior drivers
If you're 70 years old or above, a few more things will be taken into consideration when pricing your premium. It's common for eyesight to start to decline or for other medical issues to arise, which pose a risk when you're on the road. So, you may start to see an increase in your car insurance costs.
Whatever age you are, it's a good idea to take a defensive driving course. And if it's been more than ten years, it doesn't hurt to do a refresher! You'll be a safer driver for it.
How much does an excess cost?
If you make a claim and it's accepted, the excess is the amount you'll contribute towards it. At Tower we have a range of excess options available. An additional excess may apply depending on what type of car you have, and the age of the people insured by the policy.
If you choose a lower excess, this will typically increase your premium - and vice versa. When choosing your excess, consider whether you'd be able to cover the cost upfront if you need to make a claim.
If you have multiple eligible policies with Tower and you need to make a claim on more than one policy for the same event, you may only need to pay one excess.*
Legal requirements for car insurance in New Zealand
You don't legally need car insurance in New Zealand. But there are implications for you if you get into an accident or if your car is stolen. You'll have to cover the costs to repair or replace your car, all on your own. In this blog we break down the risks of driving a car uninsured.
How much will car insurance go up after an accident?
It is possible that your insurance premium will go up at renewal time if you've had an accident. But how much it goes up by will be determined by whether you were at fault for the accident, and how often you've made claims.
How to save money on your premium
The good news is, there are a few ways you may be able to reduce your car insurance premium with us.
- Pay annually: If you choose to pay your premium annually, you may be eligible for a discount of up to 10%.
- Higher excess: Generally, increasing your excess will lower your premium. Just make sure you can afford the excess at claim time.
- Choose an appropriate value: You don't want to be over or under insured. If you have an agreed value policy, make sure you have selected an appropriate level of cover.
- Drivers under 25: If you choose to exclude young drivers from your policy, this may lower your premium.
- Optional benefits: Review whether any of the optional benefits make sense for you. If not, you could remove them from your policy to help reduce your premium.
- Change your cover type: Always make sure you choose the cover type most suitable to you. You can change your cover type (e.g. switch from Comprehensive to Third party fire and theft) online in My Tower. If you don't have a My Tower account yet, simply register here.
As you can see, there are many factors that go into pricing car insurance, but here at Tower we have cover options to suit different needs and budgets. Check out our car insurance options and get a quote online when you're ready.
*For all of these benefits, please read the policy wording and cover documents to understand the terms, conditions, excesses, limits and exclusions that may apply.
The links we provide to third-party websites are for your convenience and do not constitute any endorsement or authorisation by us. The information provided on this page is general in nature and is not intended to be professional or legal advice. Tower does not accept any liability for the accuracy or content of information on this website that belongs to third parties or on any third-party website.
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