Courtney Kitto of Whangārei is feeling the strain of escalating living costs. Alongside a weekly increase of $100 in grocery expenses, Kitto is grappling with significant hikes in insurance premiums.
“I’ve had to cancel my car insurance. Fuel costs are a major issue, especially living in a rural area,” Kitto explained, highlighting her concerns about being uninsured. “It’s something I hope to reinstate when we can afford it, but with winter here and rising power bills, something has to give.”
Another resident, Sammy, echoed Kitto’s feelings about her, revealing that she, too, had to let some of her insurance coverage lapse. “Our caravan insurance went up by $45 every fortnight. Insurance costs are becoming unreasonable. The only alternative is no insurance, and they don’t lower prices even if you ask,” she said.
Justin Lim, CEO of the comparison site Quashed, reported a sharp acceleration in insurance premium increases. According to Lim, premiums for both comprehensive and third-party car insurance have risen by 40 percent, while house and contents insurance premiums have jumped by 25 percent year-on-year.
Lim noted that the average annual cost of a comprehensive policy for a $20,000 vehicle now stands at $1309, with third-party fire and theft coverage costing $500. Consumer data shows a 38 percent increase in car insurance premiums between 2021 and October 2023. Insurance Council statistics revealed that motor insurance premiums totaled $3.1 billion in 2023, up from $2.7 billion in the previous year and $2.25 billion in 2019.
“Insurers’ costs are likely rising, driving these premium increases. However, shopping around can result in savings,” Lim advised. “We find an average price difference of $300 to $600 per year between insurers for the same car.”
A spokesperson for the Insurance Council cited several factors influencing premium hikes, including newer car models with advanced technology that are costlier to repair, higher claims due to last year’s flooding and cyclone events, inflation affecting repair costs, and the condition of New Zealand’s roads impacting vehicles. “These factors all contribute to higher premiums,” the spokesperson explained.
The spokesperson suggested that consumers contact their insurers to explore options such as adjusting their excess or other policy settings and to shop around for better deals.
Representatives from Suncorp, which operates Vero and Asteron Life and partners with AA Insurance, and IAG, which runs NZI, State, and AMI, directed inquiries to the Insurance Council, emphasizing the broader industry challenges contributing to rising costs.
