Should I have insurance? Your questions answered

By MAS Team

Insurance can sometimes seem overwhelming and technical, which is why we’re here to help. Everyone has a unique lifestyle, so it makes sense that there are many insurance options with different types of policy wording. This can make people wonder what kind of insurance they need or whether they need insurance at all.

Essentially, all insurance is a form of proactive protection from potential financial loss. The idea is that you pay a small ongoing amount to receive payment or replacement in the event of certain loss, damage or injury covered by your policy wording.

This guide will answer your burning questions about insurance. Do you need insurance in New Zealand with ACC to cover injuries? Is it worth taking the time to compare contents insurance quotes? Do you really need income insurance? There are plenty of frequently asked questions to cover. Once you’ve finished reading, you should have a good baseline of information to make a better-educated decision. That way, you can try to make sure you have the right cover for yourself, your money and your stuff.

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Life insurance

One of the most common forms of personal insurance available is life insurance. There are many different options when it comes to life insurance in New Zealand. Each provider provides varying cover options to suit your lifestyle.

What is it?

So, what is life insurance? Imagine if you unexpectedly passed away. What would life for your loved ones look like without you? Obviously, they would be heartbroken at your passing. But added to this, they could be facing financial obligations including a mortgage, household and child expenses, all without your income. Could they afford it?

Life insurance can help to provide your family and loved ones with the financial freedom to cover expenses and make choices to move forward with their lives. Generally, your loved ones may be eligible to claim a lump sum after you die. Some life insurance providers (like MAS) may also pay out if you’re diagnosed as terminally ill.

Do you really need life insurance?

So, do you need life insurance? If you have debt or people who rely on you financially then you should seriously consider getting some life insurance. If you’re the sole income earner for your family life insurance becomes more important. It is unlikely you would need life insurance if you don’t have dependents or any debt. For most people, it’s best to to discuss your situation with a financial adviser for expert advice.

Health insurance

Health insurance is another type of personal insurance that you may be aware of. Putting your health first is important, and for some, health insurance is a big part of that.

Health insurance may seem like a simple concept on the surface, but there’s a lot more to it than meets the eye. In New Zealand, we are very lucky to have a public health system that is free for all New Zealanders. Unlike some parts of the world, like the USA, private health insurance isn’t seen as mandatory here. If you become sick or injured, you generally have free public health care available.

Do you really need health insurance?

As with any insurance cover, it comes down to each person's priorities. For some, they want the peace of mind that health insurance may provide. Sometimes, the waiting lists for non-urgent care can be much shorter if you go private.

Income protection insurance

Happy business team talking while having a break from work at corporate office

Another common type of personal insurance is income protection insurance or income security insurance. Some Kiwis opt to have this type of cover instead of, or as well as, health insurance. Where health insurance can fund private health care if you become ill or injured, income protection insurance can replace your income if you cannot work because of illness or injury. There are many options when it comes to income protection insurance in NZ.

What is it?

Income protection insurance can provide a regular payment to replace your loss of income if you are unable to work due to an injury or illness. For example, MAS can pay you a weekly benefit of up to 75% of your pre-disability income. Many people find this type of cover valuable, as they want to be able to support their lifestyle and that of their loved ones if they are unable to work. Income protection insurance may mean you can focus on your recovery and financially yourself until you’re ready to work again.

What about ACC?

One of the reasons someone may refrain from taking income protection is due to confusion with ACC and what it provides. ACC is a great scheme and New Zealand is lucky to be one of only a handful of countries that provide these types of benefits. But it has its limits.

Generally, ACC is only available if there is an accident. If you become ill, in most cases, you wouldn’t be eligible for ACC. There are also various common injuries that ACC won’t cover, for example, unexplained back pain or many hernias.

Do I really need income protection insurance?

When deciding, some considerations include that ACC will only pay up to certain set limits and can have a higher bar for defining disablement if you become injured. Also, if ACC decides you’re fit for any job (even if it’s not your previous one) they may stop payments. In this case, income protection insurance may be able to provide financial assistance until you can return to your original role.

It is often a case of weighing up the potential benefits from income protection insurance vs without it should you be unable to work. For example, if you earn over $60,000 per year, the premiums you’ll have available could outweigh the benefits available from the government, like the unemployment benefit.

Home and contents insurance

House with a sold sign

If you own a property or rent, you may be considering house and/or contents insurance. There are many varying options like house insurance, contents insurance and renters insurance.

What is it?

For many people, buying a home is the biggest investment they will ever make. Banks will not provide mortgage lending without house insurance in place, and understandably, you’d want to protect your investment. There are many different home and contents insurance options available that could provide financial support in events such as:

  • Storms
  • Fire
  • Natural disasters
  • Theft

Unfortunately, New Zealand is prone to natural disasters which can be unpredictable and can cause damage to your house or belongings. For this reason, many New Zealanders value having house insurance, contents insurance or a combination of the 2 to make sure their property and everything inside is protected. Where house insurance can cover costs that occur from damage to your home, contents insurance can cover your belongings.

What about EQC?

One of the natural disasters that New Zealand is particularly prone to is earthquakes. This is where Toka Tū Ake EQC (the Earthquake Commission or EQC) comes into play. We are lucky to have EQC, as they carry out research to help reduce risks from certain natural disasters. They also assist with home insurance. It’s important to note that EQC only kicks in if you have certain private insurance that meets their criteria. For example, your private insurance must cover damage or loss caused by fire and include a Fire Service Levy in the premium.

Top tip: It’s important to note that EQC will become NHI (Natural Hazards Insurance) on the 1st of July, 2024. This change will not impact any current claims.

Do you really need home and contents insurance?

If you have a mortgage, yes – you do need to at least hold home insurance.  Otherwise, you risk breaching the terms and conditions of your mortgage.

Further, EQC generally won’t cover you at all unless you have home insurance. So even if you don’t have a mortgage, it may be worth having a comprehensive house insurance policy to also access EQC. Another factor is that EQC cover does not extend to your contents. So, it may be important to protect your possessions with contents insurance, especially if you’re renting.

If you’re considering these types of insurance, it may be a good idea to speak with an insurance adviser. Otherwise, if you want to compare options and get an idea of price, there are many helpful Contents Insurance calculators out there. A tool like this can help you to distinguish how much Contents Insurance you actually need.

Top tip: The value of your home and its contents may change over time. So, it can be important to regularly review your level of cover to ensure you always have the right amount of insurance.

Motor vehicle insurance

Young woman fastening her seatbelt in a car

For many people, a car is their second biggest investment. Therefore, some kind of car insurance can be important to protect you in case the worst happens. Accidents happen, after all. During 2022, the Insurance Council of New Zealand reported that the net claims for motor vehicle (commercial and private) insurance amounted to $1,421,224,843. This highlights the cost of car accidents for Kiwis.  

What is it?

Unlike our neighbours in Australia and some other countries, it’s not mandatory to have car insurance in NZ. In saying that, many people recommend having at least third-party cover. That way, if you cause a car accident, you’re at least covered for costs from damage to other vehicles on the road. Car insurance comes in 3 main types depending on your needs and budget. These include:

  1. Comprehensive cover.This is full insurance cover for both your own insured vehicle and the costs of damage you may have caused to other vehicles or property.
  2. Third-party fire and theft. This insurance cover is only for your insured vehicle in the event of theft or fire. This option also covers damage you may cause to other vehicles.
  3. Third party cover only. This is a limited form of car insurance. As mentioned, it only covers damage caused by you to other vehicles or property. It doesn’t cover damage to your own vehicle.

Do you really need motor vehicle insurance?

Given that there are several types of car insurance, the question sometimes isn’t whether you need it, but which one is best for your situation. If you have an expensive car you may want to get comprehensive cover to protect your big investment. If you have a cheap car that you’re not too fussed about, third party only may be an option.

So, how much does car insurance cost? Many considerations may impact cost. As with other forms of insurance, it can be a wise idea to get a second opinion by talking with an insurance adviser. Otherwise, you can get an estimate of the cost online.

Explore insurance that is right for you

There are many varying forms of insurance cover available to you. It’s understandable why some people choose to put insurance in the ‘too hard’ basket. However, some people may find real value in the safety-net that many of the options we’ve covered can provide.


MAS only provides advice on products offered by its subsidiary companies. Advice is provided by MAS or its nominated representatives (who are all MAS employees). Our financial advice disclosure statement is available on our website or by calling 0800 800 627.

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