Rising car insurance costs drive New Zealanders toward underinsurance – survey
Rising car insurance costs drive New Zealanders toward underinsurance – survey | Insurance Business New Zealand
Motor & Fleet
Rising car insurance costs drive New Zealanders toward underinsurance – survey
Costs have surged by 14% for the year ending March 2024, according to Stats NZ
Motor & Fleet
By
Roxanne Libatique
Recent findings from a survey conducted by Interest.co.nz in March have highlighted a concerning trend in New Zealand’s car insurance market: sharply rising premiums are pushing many towards less comprehensive insurance coverage.
According to the latest Consumer Price Index (CPI) data from Statistics New Zealand (Stats NZ), insurance costs have surged by 14% for the year ending March 2024. This increase is broadly reflective of the financial strain many households face, yet it does not provide granular insights into specific insurance categories like vehicle, home, or contents insurance.
The survey, which garnered anonymous responses from 562 participants, aimed to explore the escalating costs of car ownership.
“I am considering moving to third-party only given the age of the car yet the premiums are rising – also sceptical about the agreed value being actually paid out in full if the car was written off,” a respondent said, as reported by Interest.co.nz.
Another respondent said: “On fixed income, premium price increase last year created the need to reduce coverage away from comprehensive to third party, fire, and theft.”
New Zealanders call for minimum car insurance coverage
The discussion also turned to the potential for mandatory third-party insurance, with several respondents advocating for legislation that requires minimum insurance coverage.
“Previous increases were mitigated by an increase in excess from $500 to $1000, but this year no change to excess and the premium increased 22.6%,” a survey respondent said, as reported by Interest.co.nz.
New Zealanders satisfied with car insurers
While there was significant feedback on rising costs and coverage adjustments, overall satisfaction with insurance providers remained relatively high. Over 51% of respondents expressed satisfaction, contrasting with approximately 12% who were dissatisfied.
The survey also touched on the loyalty aspect within the insurance market, with many noting the absence of benefits for long-term customers.
Reported increases in premiums varied widely, but the majority of participants cited hikes between 20% and 30%. Some even reported increases of 40% to 50% from the previous year. This rise in premiums is partly due to insurers trying to recuperate losses from recent events like the Auckland floods and Cyclone Gabrielle, which have significantly impacted their financial standings.
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