Compare third party car insurance

Third party car insurance won’t give you as much protection as a comprehensive policy, but it will save you money.

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Updated 25 May 2023

The breakdown

  • Comprehensive is the highest level of car insurance, but third party will still cover you for damages to another vehicle. 
  • You might consider third party cover if you have an inexpensive car and you want to save as much as possible on your insurance premiums.
  • Third party may be the cheapest type of policy, but there are still ways to save even more.
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    Author: Kevin McHugh, Head of Publishing at Banked.

    Compare third party, fire and theft car insurance

    Our comparison table can help you find the right car insurance with the right features.

    Insurer Liability Towing Roadside assistance Promotions Learn more
    AMI logo AMI $20,000,000 Yes Optional extra None currently More on AMI car insurance
    Tower insurance logo Tower $25,000,000 Yes Optional extra
    • Save $50 when you buy online
    More on Tower car insurance
    AA-Insurance-logo-200x100 AA Insurance $20,000,000 Yes Optional extra
    • AA Member discount
    More on AA car insurance
    state-insurance-logo-200x100 State $20,000,000 Yes Optional extra
    • Earn Flybuys
    • Save up to $50 when you buy online
    More on State car insurance
    trade-cme-insurance-logo-200x100 Trade Me Insurance $20,000,000 Yes Optional extra
    • 15% Trade Me member discount
    More on Trade Me car insurance
    protecta-insurance-200x100 Protecta Insurance $10,000,000 Yes Optional extra None currently
    AMP logo AMP $20,000,000 Yes Optional extra None currently

    How does third party car insurance work?

    Third party car insurance will cover you for damage you cause to someone else’s property (such as their car), but it won’t cover you for damage caused to your own vehicle.

    For example, if you accidentally bumped into someone at the traffic lights, your insurer will pay to repair the car you hit (minus your excess) but you will have to pay to fix any damage caused to your car.

    There are two types of third party car insurance:

    1. Third party
    2. Third party, fire and theft

    Third party, fire and theft provides a little more protection as it also covers your vehicle if it’s stolen or damaged in a fire. Third party will not cover you for these situations.

    The other type of car insurance available in NZ is comprehensive. As well as covering you for damage caused to other vehicles and property, comprehensive car insurance also covers damage you accidentally cause to your own car or if it’s stolen. Find out more about comprehensive policies in our guide to car insurance.

    Third party car insurance does not offer the same level of protection as comprehensive, but it is cheaper.

    Note: It’s not legal a legal requirement to have car insurance in New Zealand, but it’s highly recommended to have at least third party car insurance so you don’t risk facing a huge repair bill if you damage another vehicle.

    What does third party car insurance cover?

    The table below explains what third party car insurance will cover you for, and how it compares to the other 2 policy types.

    Bear in mind that if someone else causes damage to your car, and you can identify them, repairs to your car will be covered by their insurance (if they’re covered).

    DamageThird partyThird party, fire and theftComprehensive
    Legal liability (damage or injury you cause to others, their vehicle or property)YesYesYes
    Damage caused to your car by an uninsured vehicle Covered by policies from most providersCovered by policies from most providersYes
    Fire damageNoYesYes
    Accidental damage to your carNoNoYes

    This table is a general guide so make sure you read the policy documents of any policies you’re considering.

    Is third party car insurance right for you?

    Comprehensive is the most popular type of car insurance, with around 85% of Kiwi insured drivers choosing the highest level of cover. But this doesn’t necessarily mean it’s the right option for you.

    A key reason people choose third party car insurance is price — our car insurance guide shows that third party, fire and theft costs around half as much as comprehensive, and third party only costs about half as much as third party, fire and theft. This means that if you’re looking for the cheapest possible car insurance, a third party policy is where to look.

    If you have an old bomb that’s not worth much and you could live without your car if you had to, a third party policy might interest you for the money you’d save. You may also be short on funds right now, but still want to protect yourself financially against any damage you accidentally cause while driving.

    If you still want to save as much as possible but you live or leave your car in an area with a higher crime rate, you could consider a third party, fire and theft policy.

    However, if you have a more expensive vehicle that would cost a lot to repair or replace and/or your car is vital for getting to and from work or to other life commitments, a comprehensive car insurance policy may be a more sensible choice.

    Third party car insurance can appeal to students as they are typically younger and want to save as much as possible. See our guide to student car insurance.

    4 ways to save on third party car insurance

    It may already be the cheapest policy type available to New Zealanders, but there are ways to save even more.

    1. Compare quotes to find the best deal

    Car insurance companies price car insurance differently. That means that your friend might find that Tower gave them the lowest quote, but for you, it’s AMI, State or another insurer.

    The only way to find out who will give you the cheapest car insurance is to get quotes from multiple car insurers and compare. The more quotes to get, the more certain you’ll be that you’re getting the best deal for you.

    2. Pay annually

    Car insurance companies prefer it if you pay annually and so they will give you a discount if you do so. This discount can be around 5-10%, depending on the insurance provider.

    Paying for 12 months car insurance upfront is not possible for everyone, but if you have the money available, it can be a good way to maximise the savings on your car cover.

    3. Combine policies

    If you already have house or contents insurance, or even another car policy, you may be able to save with a multi-policy discount.

    Many insurance providers offer a multi-policy discount that can be as high as 20% for customers who have more than one policy with them. However, it’s important to compare quotes rather than simply going with your existing insurance provider — you could still save even more with another.

    4. Buy online

    Insurance providers want you to buy your cover online because it’s cheaper for them. To incentivise you to do this, many will provide you with a discount, gift card, or some other kind of bonus.

    Bear in mind that if the provider offers an online discount, it will already be factored into the price you’re quoted through their quote tool.

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    Kevin McHugh

    Kevin is the founder and Head of Publishing at Banked. With years of experience working in personal finance, insurance, and related areas, Kevin created Banked to help Kiwis make better financial decisions.