Why Commercial Motor Insurance Matters
If your vehicle is used for business in any capacity, commercial motor insurance is not optional in practice, even if it is not legally required.
Whether you are a sole trader with a single ute or a company running a fleet of trucks, your vehicles are critical business assets. One accident, theft or major repair bill can disrupt cashflow and operations overnight.
Commercial motor insurance helps protect your business from those risks.
What Counts as “Commercial Use”?
In New Zealand, a vehicle is considered commercial if it is used for business purposes. This includes:
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Transporting tools or equipment
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Making deliveries
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Carrying stock
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Visiting clients
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Employees driving the vehicle
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Signwritten vehicles promoting your business
If you are using a vehicle for work and only have private motor insurance, you risk having a claim declined.
Types of Commercial Motor Cover
There are three main levels of cover available.
Comprehensive Cover
This is the most extensive protection and covers:
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Damage to your vehicle
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Damage to other vehicles or property
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Theft and fire
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Accidental damage
This is typically the preferred option for businesses that rely heavily on their vehicles.
Third Party, Fire and Theft
This covers:
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Damage to other people’s property
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Theft or fire damage to your vehicle
Third Party Only
This covers:
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Damage you cause to someone else’s property
While third party cover is cheaper, it does not cover damage to your own vehicle.
Are Tools and Equipment Covered?
Not automatically.
If you are a tradie or contractor, you may need to add specific cover for:
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Tools of trade
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Equipment stored in the vehicle
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Theft from a locked vehicle
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Signwriting
Always check the policy wording and limits carefully.
What Affects Your Premium?
Insurers consider several factors when calculating your premium:
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Vehicle type and value
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Nature of your business
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Claims history
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Driver age and history
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Location
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Annual kilometres travelled
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Excess selected
Higher risk industries such as courier services or heavy haulage may pay more due to increased exposure.
What Happens If You Have an Accident?
If your vehicle is involved in an accident:
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Ensure everyone is safe.
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Collect details from other parties.
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Take photos where possible.
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Notify your insurer promptly.
Your insurer will assess the damage and either repair the vehicle or, if it is written off, pay out based on agreed value or market value, depending on your policy.
Is It Legally Required in New Zealand?
Motor insurance is not legally compulsory in New Zealand.
However, if you cause damage to someone else’s property, you are personally liable. Without insurance, that cost comes directly out of your business.
If your vehicle is financed, your lender will almost always require comprehensive cover.
What About Fleet Insurance?
If you operate multiple vehicles, fleet insurance may be more efficient.
Benefits can include:
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One renewal date
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Simplified administration
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Potential bulk discounts
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Consistent cover across vehicles
Fleet policies are common for trades businesses, logistics companies and service providers.
Common Exclusions to Watch For
Most policies will not cover:
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Unlicensed or unauthorised drivers
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Drivers under the influence
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Wear and tear
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Mechanical breakdown
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Undeclared modifications
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Unsecured tools
Understanding exclusions is just as important as understanding what is covered.
Protecting Your Business on the Road
Commercial motor insurance is about more than meeting lender requirements. It plays a key role in protecting your revenue, reputation and operational continuity.
If your vehicle generates income for your business, it should be insured correctly. A well structured policy ensures that when something goes wrong, your business can recover quickly and keep operating with minimal disruption.