Guide

Motor Insurance Under the ICNZ Fair Insurance Code

The Insurance Council of New Zealand publishes a binding Code that sets minimum service standards for member insurers. Almost every NZ motor insurer is a member — making the Code the de facto baseline of consumer rights in NZ general insurance.

What the Code is

The Fair Insurance Code is published by the Insurance Council of New Zealand (ICNZ) — the industry body representing licensed general insurers. The Code is binding on ICNZ members and sets minimum standards for:

  • How insurers communicate with customers (clear, plain language)
  • How insurers handle policy applications (timely, transparent)
  • How insurers handle claims (timely decisions, fair process)
  • How insurers handle complaints (internal process + EDR scheme access)
  • Special provisions for vulnerable customers and natural-disaster events

Membership is voluntary — insurers join ICNZ as a market-trust signal. Almost every retail motor insurer in NZ is a member, including AMI, State, Tower, Vero, AA Insurance, FMG, and NZI (via their licensed entities IAG NZ, Tower Limited, Vero NZ, AA Insurance Limited, FMG Insurance).

Code commitments that matter for motor claims

Plain-language wordings

The Code commits members to writing policy wordings in plain language and to providing the wording to customers before the policy is bound. This is why every NZ motor insurer's policy wording is now a downloadable PDF (rather than legalese-only documents available only on request) — that's the Code at work.

Timely claim decisions

Members commit to handling claims promptly. The Code's framing is generally "within reasonable timeframes" rather than a hard SLA, but the standard expectation in NZ motor is:

  • Acknowledgement of claim within 5 working days of lodgement
  • Initial assessment outcome within 10–20 working days for straightforward claims
  • Complex claims (total losses, fault-disputed claims, modified-vehicle claims) — communication of timeline upfront, regular progress updates

Reasons for decline

Members must provide a clear, written explanation when declining a claim — including the specific policy clauses relied on. This makes the decision reviewable — both via the insurer's internal complaints process and externally via FSCL or IFSO (see our disputes scheme guide).

Natural disaster provisions

The Code has specific provisions for handling claims following declared natural-disaster events (earthquake, storm, flood, volcanic eruption). These commit members to flexible documentation requirements, expedited assessments, and (where appropriate) emergency payments. NZ's elevated natural-disaster risk made these provisions particularly active during the Canterbury earthquakes, Cyclone Gabrielle, and the Auckland Anniversary floods.

What the Code doesn't override

The Code is a service-standard commitment — it doesn't change what's covered by your policy. The policy wording is still the binding document for cover scope. If your wording excludes hail damage to convertibles when the roof is left down, the Code can't make the insurer pay that claim. What the Code does is require the insurer to handle the decision process fairly and transparently.

How to use the Code in a dispute

If you believe an insurer hasn't complied with the Code (e.g. unreasonable delays, vague decline reasons, refusal to provide claim file documents):

  1. Reference the specific Code commitment in your written complaint to the insurer (e.g. "Section 5 of the Fair Insurance Code requires members to provide clear written reasons for declining claims — your response of [date] does not state which policy clause you relied on").
  2. If unresolved, escalate to the EDR scheme (FSCL or IFSO) — they consider Code compliance as part of their dispute determination.
  3. You can also report systemic Code non-compliance to ICNZ directly. ICNZ doesn't adjudicate individual disputes but does monitor member compliance.

Underwriter vs distributor

If you're insured under a white-label / underwriting-agent brand (Cove, Trade Me Insurance, Initio, Star Insure, Protecta), the ICNZ membership relevant to your claim is that of the underwriting insurer, not the consumer brand. For Trade Me Insurance that's Tower Limited; for Cove it's Tokio Marine; for Protecta it's now Assurant NZ; for Star Insure and Initio it's typically Lloyd's syndicates (Lloyd's brokers in NZ are members via different pathways).

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