Car insurance premiums soar

Premiums for comprehensive car insurance policies have increased by up to 38 per cent in the past two years, according to a new survey by Consumer NZ.

Rebecca Styles, investigative team leader, says the jump is likely due to rising inflation and the payouts insurers faced after extreme weather events this year, such as flooding in Auckland and Cyclone Gabrielle.

“The more an insurer needs to pay out on claims, the more likely they’ll need to charge customers more,” she adds.

Consumer obtained quotes for four different scenarios in the car insurance premium survey. For a family of four, the medium price offered was up by 38 per cent since 2021. 

For an older person it went up 24 per cent, for a middle-aged motorist 21 per cent and for a younger person 30 per cent.

Consumer recommends people shop around different insurance providers when choosing a policy as it claims switching companies may help save hundreds of dollars per year.

The survey also found more people were choosing not to insure their vehicles because of rising costs, with those without cover rose from two per cent in 2022 to 10 per cent this year. 

“Insurance provides a crucial safety net, but the ongoing cost of living squeeze is pricing people out of insuring their car altogether,” notes Styles.

Tim Grafton, chief executive of the Insurance Council, says there are a number of factors behind the surge in motor vehicle premiums.

He told Radio New Zealand newer cars had more technology in them, which made them more costly to fix, and an increase in motor vehicle claims following major flooding events this year was another contributor.