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Car insurance – a pain or a gain?


According to the AA Insurance Drivers Index 2009, which surveyed 3708 New Zealand drivers, 98 percent of respondents believe that it is important for all drivers on New Zealand roads to have some form of car insurance.

However, Ministry of Transport figures indicate that around seven percent of privately owned vehicles in New Zealand are uninsured.

The cost of car insurance is commonly cited as one of the biggest reasons for lack of cover. “Not having car insurance is a risky option,” says Martin Fox, Deputy General Manager of AA Insurance. “It could really make things very tough if you have an accident or have your car stolen.”

There are several things you can do to help you manage car insurance costs if you’re on a tight budget.

Choose your level of cover

Most insurers offer different levels of cover, so you can choose which best suits your car and your budget.

If price is an issue or if you drive a lower-value car, then Third Party could be the option for you. You’ll get a basic level of car insurance, where you’re covered against the costs of repairing others’ cars or property if you’re at fault in an accident.

“It’s pretty simple – even though your own car may not be worth very much – without insurance, if you damage someone else’s car and it’s your fault, you will have to pay for it. And this could leave you with a significant debt” says Martin.

You can also extend your cover to Third Party Fire and Theft which means that in addition to the benefits of Third Party insurance, your own car will also be covered against damage or loss through fire and theft.

Consider flexible excess options

If Third Party cover is not right for you, but comprehensive insurance doesn’t fit your budget, check to see if your policy will allow you to choose a higher excess amount in return for a lower premium.

Check the conditions of your No Claims Bonus

A No Claims Bonus can cut the cost of your premiums by as much as 60%. The specific level of discount will vary depending on your insurer, your driving record or insurance history.

“We believe that it’s important to reward drivers for the right reasons. That’s why we base our No Claims Bonus on your driving history rather than your insurance record,” explains Martin. “So even if you’ve never had insurance before, as long as you haven’t had an accident in the last five years, you could still get your maximum No Claims Bonus and have it guaranteed for life*, straight away. This means your premium wilI never go up as a result of a claim.”

Look for additional discounts

What’s more, if you’re an AA Member, you’ll receive an annual AA Rewards Discount on your premium, based on how long you’ve been a Member.

Quote online and compare

The bottom line is that car insurance is crucial, especially if you’re on a tight budget. To make sure you’re making the most of your car insurance and getting the best deal possible, shop around.

Get an online quote from AA Insurance

Terms & Conditions: *This benefit is available on comprehensive car insurance policies only, for the period of time you remain insured with AA Insurance. AA Insurance comprehensive cover automatically includes third party insurance. Policy cover with AA Insurance is subject to standard underwriting conditions. Standard excess and policy conditions apply on any insurance claim.

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