Handy tips on first time car insurance for over 25 year olds

By John Grant This is a guide to help those looking to insure a car for the first time and who are over 25. In insurance terms 25 is a magical age. Statistics show that when you reach 25 your become a better risk to insure and therefore the process is a little easier than for under 25. There are many variables. These are, your driving history, the type of car you have purchased, your location, sex, where you live, how car is parked, who else will drive the vehicle, what accessories have been fitted and probably many more. If you have been driving a car and if you have been a named driver on that policy then you need to put that insurer on the list of companies. Why, because some companies will take this into account when deciding the no claims bonus level to apply. This is important as it determines the pricing of the insurance. The maximum NCB (no claim bonus) is usually around 65% therefore without previous driving experience you may start with a 30% discount but maybe entitled to a higher (45% or 55%) if you have been a driver without any at fault accidents on an insured vehicle. So how to decide on what type of insurance to have? The choices are;

1. Comprehensive - Covers accidental damage to your car and damage to other vehicles or property.
2. Third party fire and theft - Covers your car for fire or theft as well as damage to other vehicles or property.
3. Third Party - Only covers damage to other vehicles or property.

Prices Pricing depends on the risk involved for the insurance company. Therefore comprehensive is likely to be 2-3 times more expensive than Third party with fire and theft cover and third party only will be less than half the fire and theft cover. So insuring a car for $5000 could cost $1250 for comprehensive, $500 for fire and theft and $250 for third party only. These are an illustration only. If you do not insure comprehensively then you are taking the risk on your own car. This means if you have an at fault accident and your car in a write off then you stand to lose the value of your car plus you will have to pay the excess. One thing to consider is the insurers who are members of the Insurance Council do provide a cover for third party policyholders. This means that your insurer will pay up $3000 for damage to your car provided you are not at fault and can identify the other at fault party. If you decide to insure for third party or third party fire and theft then your next consideration is the price and the applicable excess. Insurance companies have attempted to maintain lower prices by having higher excess. Expect that the excess will be around $500. But compare price and excess. For comprehensive policies it will pay to shop around. The big choice is market value or agreed value. There are pluses and minuses of both products and you should read my earlier article that covers this topic - link here. Most importantly shop around and use our guide to help you select companies. If you live in a place like Auckland then expect to pay the most. Smaller places like Whangarei, Palmerston North or Nelson will be lower reflecting the lower accident rates. Dunedin and Invercargill are likely to be the cheapest cities for insurance.