A recent survey by Consumer NZ has revealed that comprehensive car insurance premiums have risen sharply, with increases of up to 38% by 2021.
In light of these findings, Consumer NZ is advising New Zealanders to consider switching their car insurance provider, a move that could result in significant annual savings.
The rise in insurance premiums has been attributed to factors such as the financial impact of payouts following Cyclone Gabrielle and the effects of rising inflation. Rebecca Styles, Head of Investigations at Consumer, says there is a correlation between higher claims payouts and increased insurance costs for customers.
“While there is a perception that all car insurance is the same, there are some differences between policies that could save you money,” she said. “We found that younger people could save almost $38 a month by shopping around, and older people could keep an extra $40 in their pocket.”
As well as reporting on the overall rise in premiums, the 2023 Consumer Car Insurance Premium Survey also highlights the potential savings to be made by switching providers. According to the survey, a family of four could save up to $670 a year on average.
The survey looked at quotes for different demographics, including a young person, a middle-aged person, an older person and a family of four, and found that while the smallest median increase for older people was 8%, families of four faced increases of up to 38%.
An alarming trend also identified in the survey is the increasing number of people letting their car insurance lapse due to cost, rising from 2% in 2022 to 10% in 2023. This trend suggests that ongoing cost of living pressures are making it difficult for some to afford car insurance.
Styles stresses the importance of insurance as a safety net, but acknowledges that factors such as the risk of extreme weather events or an individual’s driving history, which affect premiums, are often out of their control.
“Insurance companies are constantly assessing the risk they’re taking on. In the same way, customers should assess whether the insurance they’re paying for is right for their needs,” she says.
Elsewhere in the industry, find out how motor insurer NZI is using technology, advanced data and analytics to improve driver performance and reduce risk.
