A Simple Guide to Car and Campervan Rental Insurance in New Zealand
Comparing car rental companies is about as fun as a colourblind person playing Twister. The most confusing part is when you get onto the car rental insurance. Not only are the technical insurance terms thrown around but you also have to figure out what is actually covered in car rental insurance. Because, yes, not everything that you would expect is covered and not all rental companies cover the same thing. This means diving into the “Terms & Conditions” of your rental company and nobody wants to do that! Nevertheless, since you have to do it anyway, we’ve put together this simple guide to New Zealand car and campervan rental insurance so you know what to look for when comparing vehicle rental insurance.
Offering basic insurance is a mandatory requirement for New Zealand car and campervan rental companies but there isn’t really a standard of what that insurance includes. This guide will help you understand what to look for.
What Insurance Options Do New Zealand Car and Campervan Rental Companies Offer?
When you go through the process of booking your rental car or campervan for New Zealand, you’ll notice that you’ll have three or even four insurance options to choose from. They may be named something like “Bronze”, “Silver” and “Gold” or “Basic” and “Premium” or something fun like “Risk-Taker”, “Chance-It” and “Stress-Free”. But what’s the difference?
What is Car Rental Insurance “Excess”?
For most companies, the difference between these insurance options is the amount of “excess” you would pay in case you have to make a claim. Excess, or you might know it as a “deductible”, is the first amount payable by you in the event of making an insurance claim. After you have paid the excess, the rest of the claim would be paid by the insurance company.
The different insurance options offered by car and campervan rental companies allow you to choose a more manageable excess in exchange for a daily rate, for example, reducing an excess of NZ$3,000 down to NZ$250 when you pay NZ$25 per day.
Some, but all, rental companies may include a policy with extra cover in their more premium insurance options, such as windscreen and tyre cover. This extra cover is usually clearly stated when selecting your insurance option (as the rental companies are going to use it as a selling point for their more premium insurance packages).
How Much Does Rental Car Insurance Cost with Car and Campervan Rental Companies?
New Zealand car and campervan rental companies usually present their insurance options at a daily rate. This will be added to the base rate of your vehicle rental.
All car and campervan rental companies in New Zealand include standard insurance with their base car rental for free (it is a legal requirement). You have the option to upgrade your car insurance in order to reduce the excess amount for a daily rate. This daily rate usually ranges between NZ$20 to $30 per day for car rentals and NZ$25 to $45 per day for campervans and motorhomes. A NZ$20/$25 per day insurance add-on will usually reduce your excess amount by half, while a NZ$30/$45 add-on will usually give you zero excess to pay.
We compare insurance add-on rates and excess deductions in our complete car rental comparisons, like The Best Car Rental Companies in New Zealand and campervan rental comparisons, like The Best Motorhome & Campervan Rentals in New Zealand. Take a look!
How Do You Pay “Excess” if You Damage Your Rental Vehicle?
Say you damage your rental car and you have to pay for the damages up to the excess amount, how does the car rental company get you to pay? Usually, it is paid via a “security bond”.
What is a Security Bond?
When hiring a car or a campervan in New Zealand, you will be required to pay a “bond” or a “security deposit”. This is a refundable sum of money that can be accessed by the car rental company should you, the renter, inflict any damage on the vehicle or break any of the other agreements of the rental, such as returning the vehicle without a full tank of fuel, for example.
The bond is usually accessible by the car rental company by pre-authorising your credit card when you pick up the vehicle. This is where a certain amount of funds are “held” (not credited) so that the rental company can claim those funds should they need to. This is done with your permission, of course, when you sign their rental agreement.
How Much “Bond” Do Car Rental Companies Hold?
The bond amount is usually determined by the insurance option you choose with the car rental. The bond amount is often the same as the insurance “excess” amount, which can be anywhere between NZ$750 for a car rental to NZ$5,000 for a campervan rental.
What if I Don’t Have a Credit Card?
While some car and campervan rental companies in New Zealand only accept credit cards for the bond, many others also accept debit cards while a limited few will also accept a cash deposit. Find out more about renting a car without a credit card in How to Hire a Car or Campervan in New Zealand Without a Credit Card.
What’s Included in the Car and Campervan Rental Cover?
This is where all car and campervan rental companies are different. The basic car rental insurance in New Zealand is usually referred to as:
- CDW: short for “Collision Damage Waiver” meaning it provides cover in the event of a collision or damage.
- LDW: short for “Loss Damage Waiver” meaning it provides cover in the event of theft or loss of use of the vehicle.
What this actually covers is different for every company so this is where you’ll need to read the fine print. Read your chosen car rental companies’ “Terms & Conditions” and “FAQ” pages on their websites where anything that is not covered is usually made pretty clear. If it’s not clear, contact the rental company directly to see what is.
Things that Might Not be Covered in Your Car or Campervan Rental
Typically, there are a few things that will not be covered by the car rental company’s insurance, which you will be liable (responsible) to pay for. These things usually include:
- Administration fees
- Loss of use fees
- Windscreen damage
- Tyre damage
- Roof damage
- Undercarriage damage
- Single vehicle rollover incidents
Car insurance is not compulsory to drive on New Zealand roads. Therefore, it’s not a requirement for New Zealand car rental companies to offer third-party insurance (covering other people, vehicles and property in an accident that was deemed your fault). Note that injuries are usually covered by New Zealand’s universal cover, the ACC, however, if you want full third-party cover you should purchase this separately from your car rental or choose a premium insurance add-on provided by a car rental company that does.
What Other Ways Can You Get Your Car or Campervan Rental Covered?
As you can see from the above section, your chosen car rental company may not cover everything that you want. There are other ways to “fill the gaps” in your car rental cover that you may want to consider.
Insurance From Your Credit Card
More premium credit cards are likely to cover collision or loss damage to the rental car similar to what car rental company insurance offers. Your credit card may cover some little added extras like administration fees and loss of use fees, so it’s worth investigating. However, credit cards don’t usually cover you for liability i.e. personal injury or property damage you cause.
Making a claim with your credit card insurance is another thing. You rely on the car rental company to be willing to hand over record logs of their fleet when it comes to “loss of use” claims. Like with any type of insurance, it’s likely there will be a few hurdles to jump and other parties to rely on.
Many travel insurances offer car rental insurance as an add-on. This may work out cheaper than the daily rate charged to reduce the excess by car rental companies. It may also include other damage not included in the car rental company’s insurance policies. It’s worth having a look! Find out more about getting travel insurance for New Zealand in How to Choose Travel Insurance for New Zealand.
Dedicated Car Rental Insurance
There are many insurance companies out there that offer comprehensive insurance on your rental car no matter where you are in the world. This will, no doubt, give you more cover than any basic car rental insurance offered by a car rental company. So, if you want to be fully covered and have full peace of mind, getting separate car rental insurance would be the way to go. However, you will likely have to pay big for this privilege, which begs the question, is car rental insurance worth it?
Does My Existing Car Insurance Cover Rental Cars?
If your own car is already insured, should it be in New Zealand or overseas, your insurance usually does not apply to a rental car. Car insurance is a separate item from your rental car insurance.
More About Car and Campervan Rental Insurance for New Zealand
That’s it for our guide to how car and campervan rental insurance works in New Zealand. For more advice on your car or campervan rental, check out the following guides:
- 20 Ways to Save Money on Car & Campervan Rental in New Zealand
- The Essential Guide to Renting a Car in New Zealand
- The Essential Guide to Renting a Campervan in New Zealand
Finally, if there’s anything that we’ve missed, you’re likely to find it in Travel By Car in New Zealand: The Ultimate Guide.