Comprehensive vs Third Party Car Insurance — NZ
Three tiers, one decision — what each covers and when each makes sense.
The three tiers
Comprehensive
Highest cover. Pays out for damage to your vehicle (accident, fire, theft, malicious damage, natural disaster — subject to policy terms) and damage you cause to other people's property. Standard inclusions typically cover windscreen, towing, and a rental car after an incident, though these vary by insurer.
Third Party, Fire & Theft
Middle tier. Covers damage you cause to other people's property, plus fire and theft of your own vehicle. Does NOT cover accidental damage to your own vehicle.
Third Party
Minimum sensible cover. Covers only damage you cause to other people's property. No cover for your own vehicle from any cause.
When each tier makes sense
- Comprehensive — newer or higher-value vehicle; vehicle is financed; you can't comfortably self-fund a replacement; you park in a higher-risk area.
- TPFT — older vehicle you'd be willing to lose to an accident, but where fire or theft loss would still hurt.
- Third Party — low-value vehicle where you'd accept the total cost of losing it, but you still want to manage the financial risk of damaging someone else's property.
What's not in any tier (by default)
- Personal injury — covered by ACC regardless of fault, not motor insurance
- Business use — most consumer policies exclude or limit it; declare and consider a commercial policy
- Undeclared modifications — declare them or risk a declined claim
- Undeclared drivers — same
How to choose
Start with how much you can afford to lose if the vehicle is written off tomorrow. If the answer is "nothing", you probably want Comprehensive. If "the full value", Third Party is enough. Then read the policy wording — the difference between two Comprehensive policies can be larger than the difference between Comprehensive and TPFT at the same insurer.