Understanding Car Insurance Excess
A short guide to what excess means on an NZ motor insurance policy and the trade-off with your premium.
What is an excess?
The excess is the amount you contribute when you make a claim. The insurer pays the rest (up to the policy limit). It's the most common way insurers share risk with policyholders.
Types of excess on an NZ motor policy
A single policy can have several excesses, layered on top of each other depending on the situation:
- Standard excess — the base amount payable on any claim. You typically choose between several options when applying.
- At-fault excess — some policies charge an additional amount if you are determined to be at fault.
- Driver-age excess — additional amount if the driver at the time was under 25 (or another threshold the insurer sets).
- Inexperienced-driver excess — additional amount if the driver had less than a defined number of years of licensed driving.
- Theft excess — some policies separate this out, often with security-related conditions (e.g. alarm required).
- Windscreen excess — many policies waive the standard excess for windscreen-only claims (or apply a small dedicated one).
The excess–premium trade-off
Higher excess generally means lower premium, because you're agreeing to absorb more of the cost of a claim yourself. The right level for you depends on:
- How much you can comfortably pay out-of-pocket at claim time
- How often you tend to claim (a low-claims driver benefits more from a high-excess policy)
- Your no-claims bonus position (each claim affects your future premium too)
Read the wording, not just the brochure
Brochure summaries tend to highlight the standard excess only. Layered excesses can stack significantly — read the policy wording PDF before deciding. Each NZ motor insurer's review page on this site links to their primary website and (where ingested) their policy wording.