Creating access to affordable car insurance

May 14, 2021

We have partnered with Vero to trial a car insurance product that addresses the gap for clients without insurance.

We noticed our clients using a Good Loan to buy a car were often choosing not to take out insurance.

Community Loan Worker Vijay, who works directly with clients to provide Good Loans, told us he regularly experienced clients opting not to take out insurance.

“We talk about car insurance when we we’re doing the loan application for the car and one of my clients said she had not had car insurance before,” Vijay said.

Drive Insurance is a tailored comprehensive car insurance product that aims to improve financial resilience for Kiwis, like Vijay’s client, who may be excluded from the car insurance market.

Chief Executive Fleur Howard explained:

“A car accident can be a double blow for our clients. Not only do they not have the money to repair or replace the car, but their ability to get to work is affected because they often work irregular hours outside of accessible public transport schedules.”

Getting it right

We teamed up with Vero to talk to community groups and people using Good Loans to buy vehicles; to understand more about why people didn’t take out insurance.

We investigated what they valued and how they thought insurance could be made more accessible.

The research highlighted that cost was only part of the reason people opted out of insurance.

What influenced people were their values and backgrounds. Many of the participants felt that protecting a material possession like a car was less important than taking care of their family and community.

Other participants were unaware they could be held liable for repairing damage to another person’s car, assuming that cost would be covered by that person’s insurance.

We hope the findings from the research will also provide broader insights into how easier access to appropriate and affordable insurance might help New Zealanders develop greater financial resilience.

Drive Insurance premiums are fixed at just $8 per week and our clients don’t pay any excess on their first claim.

The first no excess claim provides an opportunity for us to have a further financial conversation with our clients about how to prepare for an excess in the future.

During the trial, Drive Insurance is only available to people who take out a Good Loan for a car.