New Zealand motor insurance premiums hit $3.53 billion in 2024, up from $2.54 billion just three years earlier. That 39% jump means the average driver is paying noticeably more each year — and the main reason sits on the other side of the ledger: claims costs. Insurers paid out $2.18 billion in motor claims in 2024 alone, and every time you file a claim, it feeds into the data that drives your next renewal price.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The connection between a single accident and your next premium isn’t always obvious at the time. You crash, you claim, you get the car fixed — and then six months later the renewal letter arrives and it’s suddenly $400 higher. That’s not random. Insurers price risk partly on claims history, and the industry’s overall loss ratio tells you how much of every premium dollar is going back out the door in payouts. When that ratio climbs, everyone’s price moves up.
Understanding what actually happens to your premium after a claim — and knowing the legal timelines that govern how insurers handle your claim — is the difference between making a smart financial decision and losing money you didn’t need to lose. Here’s what you actually need to know.
What the Research Reveals About NZ Car Insurance Claims
The industry’s loss ratio is the figure that ties all this together.
What I tend to notice is most drivers have no idea what their insurer’s loss ratio even means — let alone how it affects their renewal price. But once you see the numbers, the logic becomes hard to miss. If the industry is paying out 63 cents of every dollar in claims, your individual claim history is a direct signal to the pricing algorithm.
How Premiums, Claims, and Loss Ratios Have Moved
The table below shows the five-year picture for the NZ motor insurance market. The headline figure is that gross written premium has grown by about a third since 2021, but claims costs have grown just as fast — and in some years faster.
→ Scroll right to see all columns
| Year | Gross Written Premium | Gross Claims Incurred | Loss Ratio |
|---|---|---|---|
| 2021 | $2.54B | $1.69B | 66.17% |
| 2022 | $2.77B | $1.98B | 72.03% |
| 2023 | $3.26B | $2.49B | 74.15% |
| 2024 | $3.53B | $2.18B | 62.24% |
| 2025 | $3.41B | $2.25B | 63.00% |
In 2023, the loss ratio hit 74.15% — meaning for every $100 in premium, insurers paid out more than $74 in claims. That’s the kind of year that forces across-the-board price increases the following renewal cycle. The combined ratio across all insurance classes that year was 97.92%, meaning the industry barely broke even after costs.
The practical takeaway from these numbers is straightforward. When loss ratios stay above 60% for several years running, premiums don’t come down — they go up. And your personal claims history sits inside that calculation. One at-fault claim can easily add 20–40% to your premium at renewal, depending on the insurer and the size of the payout.
Three Costly Claim Mistakes That Hit Your Wallet
Filing a Small Claim That Costs You More in the Long Run
The most common error I see is claiming for damage that costs less than your excess plus one year of premium increase. Say your excess is $500 and the repair quote is $1,200. You claim, get $700, and your premium jumps $300 at renewal. Over three years that’s $900 in extra premiums — more than the $700 you received. The maths works against you on small claims. What tends to make sense here is paying out of pocket for anything under about $1,500 unless the other driver is clearly at fault and their insurer is paying.
Admitting Fault at the Scene
Under New Zealand law, you are not required to admit fault at the scene of an accident — and you shouldn’t. Anything you say can be recorded by the other party and used by their insurer to assign liability. If you say “sorry, I didn’t see you” at the scene, that can be treated as an admission. The correct move is to exchange details, photograph the scene, and let the insurers determine fault based on evidence. If injuries are involved, you must report to the police within 24 hours — that’s non-negotiable.
Not Documenting the Scene Properly
Insurers make decisions based on evidence. If you arrive at the claims process with no photos, no witness details, and no record of road conditions, you’re handing the other side control of the narrative. A quick photo set — damage, registration plates, road markings, weather, street signs — takes two minutes and can be the difference between a claim accepted in 10 days and a dispute that drags on for months. If your claim is denied unfairly, you can escalate to the Insurance Council Dispute Resolution Scheme or seek legal guidance.
Missing the Window to Challenge a Lowball Offer
Insurers sometimes make an initial settlement offer that’s lower than what the repair or write-off is actually worth. The Fair Insurance Code requires them to act reasonably, but a low offer isn’t necessarily a breach — it’s a negotiation. You have the right to provide your own quotes, challenge the valuation, and request a breakdown of how the figure was calculated. Don’t accept the first number if it doesn’t cover the actual cost of putting the car back on the road.
How to Decide Whether to Claim and What Happens Next
Assess the Damage Before You Call Your Insurer
Before you lodge a claim, get a repair quote. If the cost is close to or below your excess, it’s almost certainly not worth claiming. Even if it’s a few hundred dollars above the excess, run the numbers: a $1,000 payout today could cost you $1,200 in higher premiums over the next three years. If you’re unsure, a detailed guide to common claim mistakes covers the scenarios where people lose the most money.
Lodge the Claim Properly
Most insurers now allow online or app-based lodgement, which is faster than phone. You’ll need: your policy number, the other driver’s details and registration, photos of the scene and damage, and a police report reference number if injuries occurred or damage exceeded $2,000. Lodge as soon as possible — delays can be interpreted as non-compliance with the policy’s “mitigation of loss” requirement, which requires you to take reasonable steps to prevent further damage.
Understand the 10-Day Window
Once you’ve lodged, the insurer has 5 business days to acknowledge the claim and 10 business days from receipt of all required information to accept or decline. If they ask for additional documents, supply them immediately. Every day the clock is paused on missing information is a day the insurer can legitimately delay. If they miss the 10-day deadline without explanation, escalate to the Insurance Council Dispute Resolution Scheme.
What to Do If Your Claim Is Declined
If your claim is declined, the insurer must provide a reason. Common grounds include non-disclosure (you didn’t mention a modification), breach of policy conditions (using the car for business when insured for private use), or a dispute over fault. You have the right to request a review, and if the insurer is a member of the Insurance Council, you can escalate to the dispute resolution scheme. For complex disputes, it’s worth getting legal advice — particularly if the claim value is significant.
How Premiums Adjust After a Claim
After a paid claim, your premium at renewal will typically increase. The size of the increase depends on: whether the claim was at-fault or not-at-fault, the amount paid out, your claims history, and the insurer’s overall loss ratio. A single at-fault claim can add 20–40% to your premium for 3–5 years. Some insurers offer “no claims discount protection” as an add-on — if you have it, check whether it applies to the type of claim you’re making. If you’ve let your policy lapse, the process to reinstate NZ car insurance after a lapse comes with its own set of cost implications.
Frequently Asked Questions About Claims and Premiums
Does a not-at-fault claim still increase my premium? ▾
How long does a claim stay on my record? ▾
What happens if the other driver doesn’t have insurance? ▾
Can I withdraw a claim after lodging it? ▾
Does the Fair Insurance Code apply to all NZ insurers? ▾
What if my insurer takes longer than 10 days to decide? ▾
What Rising Loss Ratios Mean for Your Next Renewal
The 2023 loss ratio of 74.15% was a warning shot for the industry. When insurers pay out three-quarters of every premium dollar, something has to give — and it’s usually the following year’s premiums. The 2024 and 2025 ratios came back down to around 62–63%, but that’s still well above the 50–55% range that would signal stable pricing.
What this means practically is that premium increases aren’t going away. Even if you drive claim-free, the industry-wide loss ratio influences your baseline price. The best protection against rising costs is to keep your own claims history clean — only claim when the numbers genuinely favour it, and document everything when you do. If you’re shopping around for better rates, compare policies with the same level of cover and check whether the insurer has a good record on claims handling, not just a low introductory price.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read top tips for affordable car insurance coverage in New Zealand.
Sources and Further Reading
Car insurance claim denied? Here’s what you can do as a Kiwi driver — Step-by-step guide to challenging a declined claim in New Zealand.
Car insurance claims nightmare: avoid these costly mistakes in NZ — Real-world claim errors that cost drivers money.
MoneyHub (2025). Car Insurance Claims Statistics. 🔗
InsurSpy (2026). NZ Car Insurance Claim Timeline: The 2 Days vs 18 Months Reality. 🔗
InsurSpy (2026). The Ultimate NZ Car Insurance Claims Flowchart: Your 2026 Step-by-Step Guide. 🔗
Insurance Council of New Zealand (2025). Market Data. 🔗
