A third of Kiwis could be paying too much for car insurance

Thursday, 29 October 2020

When it comes to buying insurance, set aside some time, and accept that adults read the contracts they agree to.

New research has found that as much as a third of Kiwis are paying too much for their car insurance.

Finder, a financial research and insurance comparison site, asked 1846 New Zealanders aged 18 and above about their vehicle insurance situations and found that 36 per cent of them had not changed their policy in more than ten years.

According to the site, that can be extrapolated to mean 1.1 million Kiwis are overpaying for their policy.

While everyone should be insured while driving, just in case, it pays to shop around for your insurance.

Kevin McHugh, Finder’s publisher in New Zealand, said that failing to compare means Kiwis could end up paying a “lazy tax”.

If you haven’t changed your insurance policy in a while, have a think about it. You might be overpaying for your cover.

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“Comparing car insurance is no one’s idea of fun, but think of it as a bit of pain for long-term gain. If you don’t take the time to research what else is on offer, how will you know if you’re getting the best deal?

“There is often a big price jump between the cheapest and the most expensive policies on the market. If you decide to jump ship to another provider who is offering a better deal, these savings will end up in your own pocket instead,” he said.

When it comes to choosing a car insurance policy, a separate Finder survey of 1846 car insurance holders found that Kiwis’ top 3 considerations are price (80 per cent), how comprehensive the policy is (59 per cent) and brand/reputation (46 per cent).

Other factors that ranked highly include customer service (42 per cent), having other insurance policies with the same provider (28 per cent), and roadside assistance (20 per cent).

Gen Z places the most value on price (91 per cent), compared to just 70 per cent of Baby Boomers.

McHugh urged Kiwis to consider other factors outside of price alone when comparing.

“Finder’s research shows that price is important to Kiwis when it comes to their car insurance, so they should be shopping around. The savings potential can be huge if you decide to switch, but don’t settle on the first quote you receive– try to aim for 3 quotes if possible.

“Other features worth considering are roadside assistance, policy inclusions, and whether your insurer offers agreed or market value if you need to lodge a claim.

“The cost of your policy can also depend on factors like your age, driving history and whether you’re an existing customer.

“Paying a higher excess can also help to lower the cost of your premium, but be prepared to fork out a higher amount in the event you make a claim,” he advised.