# S-P06-M-02: How should we value two vehicles and choose excesses for a family motor policy?

Collected 11 October 2026

[Car insurance study](https://nzbrands.ai/research/insurance/car-insurance)

## ChatGPT

Answer ID: a54efb62-ff48-4fbc-aaec-13c5164e1f7a

For a New Zealand family motor policy covering two vehicles, the aim is to set each vehicle’s insured value and excess so that you are protected against a major loss without paying unnecessarily high premiums. [Consumer Protection](https://www.consumerprotection.govt.nz/help-product-service/managing-money/insurance?utm_source=chatgpt.com)

## 1. Value each vehicle correctly

For each vehicle, decide whether **agreed value** or **market value** suits your situation. [Consumer NZ](https://www.consumer.org.nz/money/insurance/car-insurance/guide?utm_source=chatgpt.com)

- **Newer, high-value, financed, rare, or modified vehicles:**  
  Consider **agreed value**. This gives more certainty about the payout if the vehicle is written off or stolen, because the amount is agreed with the insurer for the policy period. [Consumer NZ](https://www.consumer.org.nz/money/insurance/car-insurance/guide?utm_source=chatgpt.com)

- **Older, common vehicles where replacement is straightforward:**  
  **Market value** may be adequate and can reduce premiums. The payout is based on what the vehicle is worth immediately before the loss. [Consumer Protection](https://www.consumerprotection.govt.nz/help-product-service/managing-money/insurance?utm_source=chatgpt.com)

To set a realistic value:
- Check current prices for the same make, model, year, kilometres and condition (for example, comparable dealer listings or private-sale listings).
- Include valuable extras such as:
  - tow bars
  - roof racks
  - accessories
  - approved modifications
- Avoid deliberately under-valuing a vehicle to save premium — you may not have enough money to replace it after a total loss. [AJG](https://www.ajg.co.nz/assets/Uploads/general-documents/AJGNZ2347-Underinsurance-personal-lines-article.pdf?utm_source=chatgpt.com)

A practical approach for a two-car household:
- **Main/family vehicle (SUV, people mover, newer car):** usually insure close to its realistic replacement cost.
- **Second vehicle (older commuter/runabout):** consider whether comprehensive cover is still worthwhile compared with its value.

## 2. Choosing excesses

The excess is the amount you contribute when you make a claim. Generally:
- A **higher excess = lower premium**
- A **lower excess = higher premium** [Consumer NZ](https://www.consumer.org.nz/money/insurance/car-insurance/guide?utm_source=chatgpt.com)

Choose an excess you could comfortably pay at short notice.

A common family approach:
- **Primary vehicle:** choose a lower or moderate excess because it is more likely to be used frequently and may involve more day-to-day claims.
- **Secondary vehicle:** a higher excess may make sense if it is worth less and you mainly want protection from a major accident or theft.

Example thinking:
- If a vehicle is worth $8,000 and the excess is $2,000, you are effectively self-insuring the first quarter of its value.
- If a vehicle is worth $45,000, a $1,000–$2,000 excess may be a smaller proportion of the risk.

## 3. Consider the household drivers

For a family policy, check:
- Who is listed as a driver (especially younger or inexperienced drivers).
- Whether there are additional excesses for certain drivers.
- Whether both vehicles are covered when driven by all family members who may use them.

## 4. Review the policy annually

Vehicle values change, especially with depreciation and changing used-car prices. Review:
- insured values
- excess levels
- driver details
- whether comprehensive cover still makes sense for an older vehicle

Agreed values generally need reviewing at renewal because the appropriate amount can change over time. [AA Insurance](https://www.aainsurance.co.nz/blog/simplifying-insurance/agreed-and-market-value?utm_source=chatgpt.com)

If you share:
1. the make/model/year of both vehicles,  
2. approximate current values,  
3. whether either has finance owing, and  
4. who drives them (including any under-25 drivers),  

I can help you work through a sensible value and excess setup for your situation.

## Gemini

Answer ID: 70297f0b-3b6d-4410-9348-82b9c0d8530e

Valuing two vehicles and choosing excesses for a family motor policy requires balancing upfront premium costs against out-of-pocket expenses if an accident or total loss occurs. In the New Zealand insurance market (with providers like AMI, State, AA Insurance, and Turners), structuring this strategically can save you hundreds of dollars each year.

---

### Step 1: Valuing Your Two Vehicles

When insuring two vehicles on a family policy, you can choose between **Market Value** and **Agreed Value**. Because a family policy often features a "primary" car (daily commuter/family mover) and a "secondary" car (older commuter, weekend runabout, or teen-driver vehicle), a hybrid approach works best:

*   **Vehicle A (The Main Family Vehicle / Newer Car):**
    *   **Recommendation:** **Agreed Value**
    *   **Why:** Agreed value ensures you receive a set, pre-determined payout if the car is written off or stolen, minus your excess. This protects you against steep depreciation or if you still carry a vehicle loan. 
    *   **Action:** Check trade platforms (like Trade Me Motors) for identical makes, models, years, and kms at each annual renewal to ensure your agreed value steps down realistically with depreciation.
*   **Vehicle B (The Older Secondary Car / Runabout):**
    *   **Recommendation:** **Market Value**
    *   **Why:** For older cars (generally over 7–10 years old), market value keeps premiums lower. Because depreciation flattens out, you won't risk a massive payout gap, and the lower premium reflects the actual trade/sale value of the car at the time of a claim.

---

### Step 2: Choosing Your Policy Excesses

An excess is the out-of-pocket contribution you make toward a claim. Standard vehicle excesses in New Zealand typically sit around $400 to $500, but you can alter them to manage cash flow.

#### 1. Standard / Voluntary Excess Strategy
*   **High Excess ($750 – $1,500):** Opt for this if your family has a healthy emergency fund and wants to lower the annual policy premium. This is ideal for the vehicle driven by more experienced drivers who have clean records.
*   **Standard Excess ($400 – $500):** Best for the main family vehicle that racks up high kilometers or parks in higher-risk public areas, ensuring minor repair claims don't strain monthly cash flow.

#### 2. Managing Additional Excesses (The Family Factor)
Family policies often incur stacked excesses that catch people by surprise. Review your policy schedule for:
*   **Driver Excesses (Under 25s / Learner / Restricted drivers):** If teenagers or young adults drive either vehicle, insurers apply an extra age/license excess (often an additional $400 to $1,500). *Strategy:* Accurately list regular drivers. If a young driver only uses Vehicle B occasionally, see if configuring them specifically to that vehicle optimizes the overall household premium.
*   **Unlisted Driver Excess:** Ensure all regular household drivers are named on the policy to avoid heavy unlisted driver penalties during a claim.

---

### Summary Action Plan

1.  **Set Vehicle A to Agreed Value** based on current Trade Me valuations for peace of mind on your primary asset.
2.  **Set Vehicle B to Market Value** to trim unnecessary premium costs on an older secondary car.
3.  **Tier your excesses:** Put a higher voluntary excess ($750+) on the car driven by experienced drivers with solid savings backup, and keep a standard excess ($400–$500) on the main family vehicle.
4.  **Audit young driver flags:** Declare all youthful household drivers transparently to prevent claim-time disputes.

Would you like to explore how bundling these vehicles under a multi-policy discount with your home and contents insurance could further reduce your overall annual premium?

## AI Overviews

Answer ID: b57a48c4-9a31-4ff2-9a92-8ced3ec758b3

To properly value your vehicles and choose your excesses for a New Zealand family motor policy, you need to balance **accurate market data** with your family's **out-of-pocket budget** in the event of a claim.

Here is how to approach both components to get the best protection and premium value.

* * *

1\. How to Value the Two Vehicles

In New Zealand, most insurers offer policies based on **Market Value** or **Agreed Value**. For a family policy with two cars, you may want to choose different valuation methods for each vehicle depending on their age and use.

Step A: Choose the Valuation Type

 * **Agreed Value (Recommended for newer/modified cars):** The insurer agrees to pay a fixed sum if the car is written off. This value is locked in for the policy year. It provides certainty but usually comes with a higher premium.

 * **Market Value (Recommended for older/depreciating cars):** The insurer pays what the car was worth on the open market right before the accident. Premiums are cheaper, but the payout drops over time as the car depreciates.

Step B: Establish the Valuation Amount

To find the right dollar figure for your policy, use these local entry points:

 * **Online Valuation Tools:** Use platforms like **Trade Me Motors (Value My Car)** , **RedBook** , or **Driven** to get a baseline price index for your exact make, model, year, and mileage.

 * **Comparable Listings:** Search Trade Me for similar cars currently selling in your region to see actual market asking prices.

 * **Professional Appraisal:** If one of the family vehicles is a classic, heavily modified, or rare import, get a written valuation from a specialist dealer or car club to force an accurate Agreed Value.

* * *

2\. How to Choose Your Excesses

The excess is the amount you pay upfront when making a claim. Choosing the right excess requires looking at who is driving the cars and how much risk you can comfortably afford.

Consider a Split Excess Strategy

Because this is a **family policy** , you do not have to choose the same excess for both vehicles. Look at how each car is used:

 +-----------------------------------------------------------------------------------+

 | Vehicle Scenario | Recommended Excess Strategy |
 +-----------------------------------------------------------------------------------+

 | Vehicle 1: Daily Family Hauler | Choose a standard or higher excess |
 | (Driven by experienced parents, | ($500 - $1,000) to keep the premium down, |
 | lower accident risk) | as claims are statistically less likely. |
 +-----------------------------------------------------------------------------------+

 | Vehicle 2: The "Runabout" | Keep the standard excess lower ($400 - $500). |
 | (Driven by teens or young adults, | Young drivers face mandatory age excesses, |
 | higher accident risk) | so a high base excess will stack heavily. |
 +-----------------------------------------------------------------------------------+

Factor in NZ Age & License Excesses

Be aware that if younger family members (typically **under 25**) or restricted/learner drivers use the vehicles, insurers will apply **additional driver excesses** on top of your base excess during a claim:

 * **Under 21 Driver Excess:** Often an extra $500–$1,000.

 * **21–24 Driver Excess:** Often an extra $300–$600.

 * **Unnamed/International/Restricted License Excess:** Extra fees may apply if the driver doesn't hold a clean, full NZ driver's license.

 _Tip: If your teenagers only drive Vehicle 2, list them as named drivers**only** on that specific vehicle to avoid inflating the premium or risks on Vehicle 1._

* * *

If you want to tailor this further, tell me:

 * What are the **make, model, and year** of the two vehicles?

 * Will any drivers **under the age of 25** or on a **restricted/learner license** be using them?

I can give you more specific advice on which policy add-ons (like windscreen excess buyouts) might save you money.

## Google AI Mode

Answer ID: 16adff38-31b9-4a55-b311-6e9c4b028cac

* * **Agreed Value vs. Market Value** :
 * Agreed Value locks in a set amount for the vehicle for the policy term, which is great for budgeting and knowing exact payouts, though it can cost slightly more in premium.
 * Market Value pays out what the car is worth right before the accident; it has lower premiums but leaves you exposed to sudden drops in secondhand car prices.

 * **Choosing the Right Sum Insured** :
 * For older or unique vehicles, check sites like [Trade Me Motors](https://www.trademe.co.nz/a/motors) to see what similar makes, models, and years are selling for to set an realistic agreed value.
 * For newer cars, keep the value updated annually to match depreciation so you aren't paying for extra coverage you won't receive.

 * **Balancing Your Excess** :
 * The excess is the amount you pay out-of-pocket when making a claim. A higher excess lowers your regular premium, while a lower excess costs more monthly/annually but protects your cash flow during a minor accident.

 * **Age and Driver-Specific Excesses** :
 * Family policies often add an extra underage or inexperienced driver excess if younger family members drive the cars. Check if this applies and weigh whether it’s cheaper to absorb that risk or pay the higher premium to reduce it.

 * **Bundling Multi-Car Discounts** :
 * Putting both vehicles on one family policy usually unlocks a multi-car discount with insurers like [AA Insurance](https://www.aainsurance.co.nz/) or [State Insurance](https://www.state.co.nz/), making it easier to manage renewal dates and shared excess options.

 *

If you'd like, let me know:

 * The **approximate ages and makes** of the two vehicles
 * Who the **main drivers** are (including any under-25 drivers)

I can help you weigh whether **agreed or market value** makes more sense for each car.