Most people know the difference between comprehensive, third party fire and theft, and third party only. But what exactly is included under each one? This guide breaks down every cover feature in detail - from windscreen and towing to courtesy cars and personal belongings - so you know precisely what you are paying for.
A car insurance policy is not just one blanket of protection. It is actually a collection of individual features, each covering a specific type of event or loss. Understanding what these features are - and which ones are included at each cover level - makes it much easier to evaluate whether a policy gives you what you actually need.
At the highest level, NZ car insurance policies cover three broad categories: damage to your own vehicle, damage or loss caused by third parties or events outside your control, and liability for damage you cause to other people's property. Within those categories sit a range of specific features that vary depending on whether you hold comprehensive, third party fire and theft (TPFT), or third party only cover.
The table below provides a detailed feature-by-feature comparison across all three cover levels. After the table, each feature is explained in its own section so you can understand how it works in practice and what the common variations are between insurers.
It is worth noting that the exact details differ from one insurer to the next. Tower, AMI, AA Insurance, and State all structure their policies slightly differently. The breakdown below reflects what is typical across the NZ market, but always check the policy wording for the specific product you are considering.
| Feature | Comprehensive | Third Party, Fire & Theft | Third Party Only | Notes |
|---|---|---|---|---|
| Collision and accidental damage | Covered | Not covered | Not covered | The main reason most people choose comprehensive |
| Theft of entire vehicle | Covered | Covered | Not covered | Both comprehensive and TPFT cover vehicle theft |
| Theft of parts (e.g. catalytic converter) | Covered | Usually covered | Not covered | Check if parts theft is specifically listed |
| Attempted theft / break-in damage | Covered | Usually covered | Not covered | Covers damage caused during a break-in attempt |
| Fire damage | Covered | Covered | Not covered | Includes engine fire in most policies |
| Storm and flood damage | Covered | Not covered | Not covered | Increasingly relevant with NZ weather events |
| Earthquake and volcanic damage | Covered | Not covered | Not covered | EQC does not cover vehicles |
| Hail damage | Covered | Not covered | Not covered | Common in some NZ regions |
| Vandalism and malicious damage | Covered | Not covered | Not covered | Only comprehensive covers deliberate third-party damage |
| Falling trees and debris | Covered | Not covered | Not covered | Classified as accidental damage |
| Third-party property damage liability | Covered (typically $20M) | Covered (typically $20M) | Covered (typically $20M) | All three levels include this |
| Windscreen and glass | Usually included | Rarely included | Not included | Often with reduced or nil excess on comprehensive |
| Towing after an accident | Usually included | Sometimes included | Rarely included | Limits vary - typically $500 to $2,000 |
| Courtesy car / rental car | Often included | Rarely included | Not included | May be limited to approved repairer use only |
| Emergency accommodation and travel | Often included | Sometimes included | Not included | Typically up to $1,000 to $2,000 |
| Personal belongings in the car | Often included | Sometimes included | Not included | Usually capped at $300 to $500 |
| Keys and locks replacement | Often included | Rarely included | Not included | Some policies have specific sub-limits |
| Child car seat replacement | Often included | Not included | Not included | Replacement after any accident, even if seat looks undamaged |
| Trailer cover | Sometimes included | Rarely included | Not included | Often needs to be specified on the policy |
| New-for-old replacement | Some policies | Not available | Not available | Typically for cars less than 1 to 2 years old |
Collision and accidental damage cover is the single biggest reason people choose comprehensive car insurance. It is the feature that pays out when your car is damaged in a crash, a reversing incident, a scrape in a car park, or any other sudden, unintended event.
This covers a wide range of scenarios. You clip a pole backing out of a tight space. Someone rear-ends you at a set of lights. You hit black ice on a Canterbury back road and slide into a ditch. A shopping trolley rolls into your door in a supermarket car park. All of these fall under accidental damage.
With TPFT or third party only cover, none of these situations are covered for your own vehicle. Your insurer will pay for damage you cause to someone else's property, but your car gets nothing. This is the fundamental trade-off between comprehensive and the other cover levels.
One thing to be aware of: accidental damage cover does not extend to mechanical failure or wear and tear. If your engine seizes because of a worn timing belt, that is not an insurance claim. If your car overheats because the radiator has corroded over time, that is not covered either. Accidental damage means sudden, unexpected events - not things that happen gradually.
Most comprehensive policies apply your standard excess to accidental damage claims. If your total excess is $500 and the repair costs $3,000, you pay $500 and your insurer covers the remaining $2,500. Some insurers apply additional excesses in specific circumstances - for example, a young driver excess if the person behind the wheel is under 25. Our guide to insurance excess explains how this works in detail.
Theft cover protects you if your car is stolen - either taken entirely or if parts are stripped from it. This feature is included in both comprehensive and third party fire and theft policies, making TPFT a popular middle-ground option for people who want some protection for their own vehicle without paying for full comprehensive cover.
In New Zealand, vehicle theft remains a real concern. Catalytic converter theft has been particularly common in recent years, with thieves targeting certain makes and models for the precious metals inside the converter. If your policy includes theft of parts, this type of incident would be covered.
Break-in damage is a related but slightly different feature. If someone smashes your window to steal items from inside, or damages your locks trying to get in, the damage to the car itself falls under break-in or attempted theft cover. Most comprehensive policies and many TPFT policies cover this, but it is worth confirming in the policy wording.
There are conditions that apply. Most insurers require you to file a police report for any theft claim. Some policies also require that the vehicle was locked at the time of the theft, or that you had taken reasonable precautions to secure it. Leaving your car running and unlocked while you duck into a shop, for example, could give your insurer grounds to decline the claim.
The Consumer NZ car insurance guide notes that theft claims can sometimes take longer to settle than damage claims, particularly if the car is not recovered. Insurers typically wait a set period (often 14 to 30 days) before treating the vehicle as permanently stolen and processing the claim.
If your car is recovered after being stolen, your insurer will assess the damage and either repair it or write it off. Any damage caused during the theft - broken ignition, damaged locks, interior damage - is usually covered under the theft component of the policy.
Fire cover protects your vehicle if it is damaged or destroyed by fire - whether that is an engine fire, an electrical fault that causes a blaze, or an external fire such as a neighbouring property fire that spreads to your car. Both comprehensive and TPFT policies include fire cover. Third party only does not.
Weather and natural disaster cover is where things get more specific to comprehensive policies only. This includes damage from storms, flooding, hail, earthquakes, volcanic activity, tsunamis, and landslides. In a country like New Zealand, this is not hypothetical. Cyclone Gabrielle in 2023 caused widespread vehicle damage across the North Island, and severe flooding events in Auckland in the same year destroyed thousands of cars.
A key point that catches people off guard: the Earthquake Commission (EQC, now Toka Tu Ake) covers residential buildings and land for natural disaster damage, but it does not cover vehicles. Your car insurance is the only protection you have if an earthquake, flood, or volcanic event damages your vehicle.
Hail damage is another common weather-related claim in New Zealand. A severe hailstorm can cause hundreds of small dents across the body of a car, and the repair cost can be surprisingly high - especially if paintless dent removal is not possible and panels need to be replaced. Only comprehensive cover protects against this.
It is also worth knowing that some policies have specific conditions around flood damage. If you drive into a flooded area that has been closed or signposted as dangerous, your insurer may decline the claim on the basis that the damage was avoidable. The Insurance Council of New Zealand (ICNZ) has published guidance on how insurers typically assess weather-related claims.
Third-party liability is the one feature that is included in every car insurance policy, regardless of the cover level. Whether you have comprehensive, TPFT, or third party only, your policy will cover damage you cause to other people's vehicles and property.
This is the core of what third party only cover provides - and for many drivers, it is the main reason they carry insurance at all. If you run into someone else's car, reverse into a fence, or cause damage to a shop front, your insurer pays for the damage to the other party's property. Without this cover, you would be personally liable, and the costs can escalate quickly.
Most NZ car insurance policies cap third-party liability at around $20 million. That might sound like far more than you would ever need, but consider a scenario where you cause a multi-vehicle pile-up on the motorway, or you crash into a building and cause structural damage. The costs in those situations can be substantial.
One important distinction: third-party liability covers property damage only. It does not cover the other person's medical bills or personal injury costs - that is handled separately by ACC in New Zealand. And it does not cover damage to your own vehicle. If you cause the accident and you only have third party cover, your car gets nothing.
If the other driver is at fault and they have insurance, their insurer will typically pay for the damage to your vehicle. But if they are uninsured - and remember, roughly one in four vehicles on NZ roads may have no insurance - you would need your own comprehensive cover to be protected. This is one of the strongest arguments for stepping up from third party to comprehensive.
Beyond the core cover features, car insurance policies in New Zealand often include a range of additional benefits. These are sometimes called "bonus features" or "additional benefits" and are where the biggest differences between insurers tend to show up. Here is a breakdown of each one.
Windscreen and glass cover. This pays for repair or replacement of your windscreen, side windows, rear window, and sometimes sunroof glass. Most comprehensive policies include this, often with a reduced or nil excess - meaning you can get a cracked windscreen repaired without paying anything out of pocket. Stone chips on NZ highways are extremely common, so this is a genuinely useful feature. Tower and AA Insurance both include windscreen cover in their comprehensive policies, though the details differ.
Towing and recovery. If your car cannot be driven after an accident or covered event, this feature pays for it to be towed to a repairer or a safe location. Most comprehensive policies include towing, but the maximum amount varies - some cap it at $500, others go up to $2,000 or more. Some policies also cover recovery costs if your car ends up in a ditch or off a bank. Check the limit, because a long-distance tow from a remote area can easily exceed a low cap.
Courtesy car or rental car. Some comprehensive policies provide a courtesy car or contribute toward rental car costs while your vehicle is being repaired after a covered event. This is a feature where insurers differ significantly. Some offer a courtesy car at no extra cost, but only if you use their approved repairer network. Others offer it as an optional add-on for an additional premium. A few do not offer it at all. If you depend on having a car every day, this is a feature worth checking carefully.
Emergency accommodation and travel. If your car is damaged or breaks down more than a certain distance from home (often 50km to 100km), this feature covers emergency accommodation, meals, and travel costs to get you home or to your destination. The typical limit is between $1,000 and $2,000 per event. This can be a lifesaver if you are touring the South Island and your car is written off far from home.
Personal belongings. This covers personal items that are in your car when it is stolen, damaged, or involved in an accident. Think laptops, phones, sports gear, or tools. The cover is usually capped at a modest amount - typically $300 to $500 total. It generally does not cover cash or items left in plain sight. If you regularly carry expensive equipment in your car, your contents insurance or a separate policy may provide better protection.
Keys and locks. If your car keys are lost, stolen, or damaged, some policies cover the cost of replacing the keys and reprogramming or replacing the locks. Modern car keys with electronic immobilisers can be expensive to replace - often $300 to $800 or more, depending on the make and model. This feature is not included in every policy, so if your car has an expensive key system, it is worth checking.
Child car seat replacement. After any accident - even one where the seats look undamaged - safety experts say child car seats should be replaced because the internal structure may be compromised. Some comprehensive policies cover the cost of replacing child car seats after an incident. This is a smaller feature in dollar terms, but a meaningful one for families.
The Sorted.org.nz car insurance guide emphasises that these additional benefits can make a real difference to the overall value of a policy, especially when two policies have similar premiums but different inclusions.
One of the trickiest things about car insurance is that two policies with the same name - "comprehensive car insurance" - can cover quite different things depending on which insurer you choose. The core features are broadly similar, but the details and limits are where the real differences lie.
Windscreen excess. Some insurers offer nil excess on windscreen repairs under comprehensive cover. Others charge a reduced excess of $100 to $200. A few apply the full standard excess. If you drive a lot of highway kilometres and stone chips are a regular occurrence, this difference alone can be worth hundreds of dollars over time.
Courtesy car terms. AMI includes a courtesy car as a standard part of their comprehensive policy, but only if you use their approved repairer. AA Insurance takes a similar approach. Other insurers offer it as an optional extra, and some do not offer it at all. The size and type of courtesy car also varies - it may not be equivalent to your own vehicle.
Agreed value vs market value options. Most NZ insurers offer both agreed value and market value options for comprehensive cover. However, the way they calculate market value can differ, and some insurers place restrictions on agreed value - such as only offering it for cars under a certain age. Our agreed value vs market value guide covers this in detail.
Natural disaster sub-limits. While most comprehensive policies cover natural disaster damage, some apply a sub-limit or a higher excess for certain events. After major weather events in 2023, some insurers adjusted their terms around flood and storm damage. It is worth checking whether your policy has any specific exclusions or higher excesses for weather-related claims.
Young driver excess. If drivers under 25 (or sometimes under 21) use your vehicle, most insurers apply an additional excess on top of your standard excess. The amount varies - it might be $250 with one insurer and $750 with another. If you have a young driver in the household, this is a significant variable to compare.
Liability cap. Most NZ insurers set the third-party property damage liability cap at $20 million, but some go higher. The cap is rarely an issue for everyday incidents, but for a serious multi-vehicle accident or major property damage event, the difference could matter.
The Consumer NZ car insurance guide regularly compares these details across major NZ insurers and is a useful resource for side-by-side evaluation.
Every car insurance policy comes with a document called the policy wording (sometimes called the product disclosure statement or PDS). This is the legal contract between you and the insurer, and it spells out exactly what is and is not covered. It is not light reading, but knowing what to look for can save you from unpleasant surprises down the track.
Exclusions section. This is the most important part to read. It lists everything the policy does not cover. Common exclusions include mechanical breakdown, driving under the influence, racing or rallying, using the car for undeclared commercial purposes, and damage caused by war or terrorism. Some exclusions are standard across all insurers; others are specific to individual policies.
Conditions of cover. This section outlines what you need to do to keep your cover valid. It typically includes obligations like keeping your car in a roadworthy condition (current WoF and registration), notifying the insurer of any changes to your circumstances, and taking reasonable care to prevent loss or damage. Failing to meet these conditions can give the insurer grounds to reduce or decline a claim.
Definitions. Insurance policies use specific definitions for key terms like "accident," "excess," "total loss," and "market value." These definitions matter because they determine exactly how the policy applies. For example, "market value" in the policy might be defined differently from what you would see on Trade Me or at a dealership.
Claims process. The policy wording will outline the steps you need to follow to make a claim, including time limits for reporting an incident, documentation requirements, and the insurer's rights to assess and settle the claim. Knowing this in advance means fewer surprises if you ever need to claim.
Sub-limits and caps. Even within covered features, there are often limits on how much the insurer will pay. Personal belongings might be capped at $500. Towing might be limited to $1,000. Emergency accommodation might have a per-night or total-event cap. These sub-limits are usually listed in a benefits summary or schedule within the policy document.
The Financial Markets Authority (FMA) provides guidance on understanding insurance contracts, and the Insurance & Financial Services Ombudsman (IFSO) can help if you believe your insurer has not applied the policy terms fairly.
If reading the full policy wording feels overwhelming, start with three things: the exclusions, the excess amounts (including any special excesses), and the sub-limits on additional benefits. These three areas account for the vast majority of claim disputes.
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