New data indicates a significant surge in vehicle insurance premiums, far exceeding the rise in vehicle prices, parts costs, and average incomes.
According to figures compiled by the online insurance platform Quashed, the average comprehensive premium quote in the March quarter reached $1309, representing a 40 percent increase compared to the same period last year. Third-party insurance quotes, which include fire and theft coverage, also saw a 40 percent rise year-on-year, with the average quote reaching $500.
Stats NZ reported a 22.6 percent increase in average vehicle insurance premiums during this time, significantly outpacing the 4.1 percent rise in average incomes.
Kris Faafoi, chief executive of the Insurance Council, attributed the rising premiums to several factors. These include the increasing expense of repairing vehicles, the impact of adverse weather causing pothole-related damage, and the widespread vehicle write-offs resulting from the effects of Cyclone Gabrielle.
Stats NZ data also revealed modest increases in vehicle prices themselves: new vehicle prices rose by 0.9 percent, used vehicle prices by 0.3 percent, and motorbike prices by 0.3 percent. However, the cost of vehicle parts experienced a 5.6 percent increase, while vehicle repair expenses increased by 5.5 percent.
Faafoi added that the trend of consumers opting for newer car models, which are often more expensive to replace and repair, also contributes to rising premiums. “If anyone’s replaced the windscreen lately, it’s not just the glass itself, it’s the technology in it that you have to get replaced too. All of those things are flowing into premiums,” Faafoi stated.
Abby Damen, a Consumer NZ campaigns adviser, pointed out that insurance prices can vary greatly based on factors such as the driver’s age, gender, and driving frequency. Damen suggested that obtaining regular quotes from at least three different insurers could potentially save motorists between $450 and $670 annually. It is also important for consumers to periodically review their policy details when personal circumstances change.
“Let’s say you’re suddenly parking your car in your garage, or you don’t have a teenager driving your car anymore because they’ve moved out of home. You don’t want to be paying for cover that you don’t actually need,” Damen explained.
Faafoi advised anyone facing financial strains to discuss their options with their insurance provider. “There are lots of things that insurers can do, like looking at excesses and policy details to make sure the settings are right,” Faafoi said.
