Not Adding Up: Spotlighting Add-on Insurance in Aotearoa | The Salvation Army

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Not Adding Up: Spotlighting Add-on Insurance in Aotearoa

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Posted June 15, 2022


Why should The Salvation Army be concerned about what kinds of insurance products people are taking out when buying cars or in other situations? Aren’t these insurance products a good thing for people to have? Or are they another rip-off or scam product sold to consumers, especially poorer New Zealanders in vulnerable situations? 

These questions frame this short advocacy paper that takes a closer look at the add-on insurance products people buying cars on finance are offered. Essentially, we do affirm that vehicle insurance is a worthy and important thing for car owners to have. However, this add-on insurance market has been described as potentially the ‘country’s least competitive [insurance and loans] market and very poor value insurance’.

The Salvation Army serves and supports over 140,000 people and whānau (families) per year, through our various churches and social support services. Many of these people are on benefits, lower incomes and face multiple complex social and financial issues. Additionally, many who use our various services buy cars via finance. Therefore, we believe there are real risks that this add-on market is disproportionately affecting vulnerable consumers and those whānau facing precarious financial positions as they navigate buying cars on finance and trying to understand intricate insurance products and details. This is why so many of our financial mentors and budgeters recently joined the voices advocating for the Commerce Commission to more closely investigate, monitor and regulate this market. This paper explores these issues further, looks at some lessons from how other nations have addressed these problems, provides some case studies from our own clients and offers up some ideas and solutions for moving forward. 

Full paper available for download at the bottom of the page. >>

A companion Bible study to this report is also available here.

Paper by Ronji Tanielu, Principal Policy Analyst, SPPU

Photo by Towfiqu barbhuiya on Unsplash

Not Adding Up: Spotlighting Add-on Insurance in Aotearoa

Type: PDF
Size: 579.87 KB
Date: 14 Jun 2022