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Guide to insuring your car

Types of insurance

Ask your insurer

With finance

Get a quote

Unless you finance your car, insurance cover is up to you. Vehicle insurance isn't compulsory, and because of ACC, you are unlikely to be held liable for personal injury.

But... If you're tempted not to get insurance, ask yourself - “If I hit a Bentley; or a house - can I afford to fix it? Also, if you’re among the small percentage who are absolutely sure you can cover every single possible liability with cash, don't bother.

Protect yourself from other peoples mistakes

Insurance also protects you from other people's mistakes if they're not insured. If you're covered your company will pay for the damage to your car regardless of who was responsible. If the other party is at fault, whether they're insured or not they're still liable, and can be asked to cover the damage. Your insurance company will chase it up.

If neither of you are insured, you'll have to approach the person you say caused the damage. If they dispute the responsibility the ongoing action can become difficult and expensive.

Types of insurance available

$$$$ Full Cover – covers all loss – fire, theft, break-ins, repairs whether smasher or innocent smashee

$$ Third party, fire and theft – covers the other cars you hit, if it’s stolen or sets itself alight

$ Third party only - which really only covers property damage to whomever you’ve hit

The latter can cost very little - as low as $100 – and is worth considering even with a cheap vehicle, as it protects you from that nightmare scenario when you've scratched a Bentley.

Tell the truth

The Insurance Law Reform Act requires you to tell the truth and giving false information, even by accident, can have consequences.

Whatever the insurance, you must provide reasonably comprehensive information on the vehicle, including its condition and mileage. You must declare any financial arrangements, ie a finance deal; and you'll have to disclose stuff like your driving record - including accidents and convictions. Make sure you check if others will be covered, and if there is an age restriction.

If it comes down to a claim, reputable companies look at cases on merit, and a discrepancy won't automatically cancel your insurance - but do you want to find out? Companies can't check everything, but they will check if you make a claim, and often police reports will disclose matters like drink-driving convictions you have 'forgotten' to mention.

Have you asked your insurer about...

There are a number of key things to look for when you insure your car.

-Agreed value - does what you think it's worth align with what your insurer thinks?

-Discounts - may as well ask

-Excess - how can it be reduced?

-No claims bonus - what are the benefits?

-Accommodation, towing and storage costs - are they provided 24/7?

If you’ve financed your car…

Insurance is compulsory. You must get full, comprehensive insurance. Financed cars can't leave the dealership unless full insurance has already been obtained. So remember to consider the cost and calculate it into your purchase price.

Be aware that you are insuring the car, not the loan amount. If the car is worth less than the loan, the insurer will pay the car off - and you pay the difference.

Get a quote online

Finally, it's worth checking out what your car insurance will cost you. You can do it all online by visiting our insurance page here.

Auto Trader New Zealand