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How Does Car Rental Insurance Work in New Zealand?

A great way to explore New Zealand is to get on the road in a reliable car rental. However, if your rental car is involved in an accident or gets stolen you could be responsible to cover the cost of the rental vehicle, which of course, can cost you thousands of dollars. VroomVroomVroom has put together a quick guide to help you understand the car rental insurance process in New Zealand. 

How car rental insurance works?

Car rental companies in New Zealand offer excess reduction products, to protect renters from paying damage costs. Although Loss Damage Waiver is generally included in the rates, an excess amount will still apply. By purchasing excess reduction products, you can reduce your financial liability. 

Which car rental insurance do I need?

Rental car companies in New Zealand are likely to offer these four optional types of hire car insurance coverage when you pick up your car rental: the collision damage waiver, liability insurance, personal accident insurance and personal effects coverage.

Loss Damage Waiver

Generally included in the rates, Loss Damage Waiver reduces a renter's financial liability to an excess amount. If you do not comply with the terms and conditions of the rental agreement, it may void any protection products you have purchased. 

Supplemental Liability Protection

Buying this insurance assures you are covered for costs of injury to others in an accident. Note that car hire companies are mandated to offer the minimum level of liability insurance required by states. Although this does not give enough protection in case a serious accident occurs.

Personal Accident Insurance

Electing this insurance will pay for injuries or death of the driver and passengers of your rental car for an additional $1 to $5 a day. But do you need it? Probably not. Consumer Affairs states that the benefits offered by personal accident insurance are already included in your health, life or car insurance policies — or they are added in the coverage the car rental company's required to provide by law.

Personal Effects Coverage

This coverage offers compensation for the theft of personal items from your rental car for an additional $1 to $5 a day.  But the question is do need this? The answer is no. If you have a homeowners or renters insurance policy, you are most likely already covered for personal items loss.

Which car rental insurance should I get?

Remember that you are not obliged to purchase these four insurances that the rental agency asks you to buy. However, if there's one type of insurance you should get: it should be the Collision Damage Waiver (CDW). In New Zealand, CDW and theft protection are included in all rates. Both the  CDW deductible and theft protection have  similar prices, which range from US$1570 to US$2390, depending on the supplier and what kind of vehicle. Read our Reducing Your Car Rental Insurance Excess in New Zealand if you want to gather more information  about rental insurance in New Zealand.

When to buy car rental insurance?

Perhaps the most common question for drivers who are traveling is whether they need to purchase additional car insurance for their rental cars. Excess cover is not compulsory although you will be offered cover from the hire car supplier at Pickup. Some credit card suppliers offer excess cover or if you have travel insurance. However it is important to check your policies prior to travel  and to check on any other rental car insurance coverage that you might need.