How does car insurance work for young drivers in New Zealand?
General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.
Yes, drivers under 25 can be insured, including learners and restricted licence holders, but it usually costs more and one rule matters more than the price: the driver has to stay inside their licence conditions. Tower covers learner and restricted drivers only while they are driving inside those conditions (Tower's car insurance page), and the Insurance Council of New Zealand (ICNZ) says drivers under 25 are statistically more likely to be in accidents, so they tend to pay higher premiums (ICNZ). Tower's comprehensive wording also adds extra excesses when an inexperienced driver is at the wheel.
Why car insurance costs more for under 25s
ACC says young drivers make up 13% of licence holders but 30% of serious injuries on New Zealand roads and 26% of fatalities, and the NZ Transport Agency Waka Kotahi (NZTA) says drivers on a restricted licence are seven times more likely to be in a fatal or serious injury crash than other drivers. Consumer Protection says to expect a higher premium for drivers who are under 25 or who do not have a full licence. QuoteHub's guide to what car insurance costs in NZ covers the other factors, and no premium figures appear here because each price depends on the exact car and driver.
Licence conditions that decide whether a claim is paid
Tower's wording says the policy does not cover you if the car is driven by anyone who "does not have a legal licence to drive in New Zealand, or is not complying with the conditions of their licence" (Tower's comprehensive wording). ICNZ says that if driving outside licence restrictions contributed to an accident, an insurer may not cover it (ICNZ). The conditions NZTA sets are therefore insurance rules as well as road rules.
- Learner licence: no driving alone, a supervisor beside the driver at all times, and learner plates on the front and back of the car (NZTA learner licence rules).
- Restricted licence: driving alone from 5am to 10pm, and a supervisor in the front passenger seat from 10pm to 5am. Passenger limits apply without a supervisor. A test passed in an automatic means automatics only unless a supervisor is present (NZTA restricted licence rules).
- Under 20: the alcohol limit is zero (NZTA restricted licence rules), and Tower's wording excludes cover when the driver's alcohol level is over the legal limit (Tower's comprehensive wording). NZTA plans a zero limit for every learner and restricted driver, with the date still to be confirmed (NZTA licence changes).
NZTA's licence changes take effect on 25 January 2027 and alter how long a young driver spends at each stage (NZTA licence changes).
| Stage | Minimum time until 24 January 2027, drivers under 25 | Minimum time from 25 January 2027, drivers under 25 |
|---|---|---|
| Learner licence | 6 months | 12 months, or 6 months with an approved course or logged supervised driving hours |
| Restricted licence | 18 months, or 12 months after an advanced driving course | 12 months, with no advanced driving course reduction |
NZTA was still finalising the logged-hours rules when this page was checked (NZTA licence changes).
What this looks like on the road
Take a young driver on a restricted licence who borrows the family car after a late shift. If nobody qualifying is beside them between 10pm and 5am, they are outside their licence conditions (NZTA restricted licence rules), and Tower's wording excludes cover when the driver is not complying with those conditions (Tower's comprehensive wording). That is the situation the exclusion is written for, so a crash on that drive is the one most likely to go unpaid. The same logic runs through the everyday cases below.
| Situation | What the rules and Tower's wording say |
|---|---|
| Learner drives alone | NZTA says a learner needs a supervisor beside them at all times (NZTA), and Tower's wording excludes a driver not complying with licence conditions (Tower). |
| Restricted driver alone late at night | Driving alone is allowed from 5am to 10pm only (NZTA). ICNZ says an insurer may not cover an accident that driving outside restrictions contributed to (ICNZ). |
| Restricted driver with friends in the car | Without a supervisor, passengers are limited to a short list that includes a partner, a dependent child and a parent or guardian (NZTA). |
| Younger sibling or friend borrows a car insured with the under 25 option | No cover while anyone under 25 drives or has care or control of the car, unless that person stole it (Tower). |
| Young driver starts using a parent's car regularly | Tower's wording requires you to tell it immediately when someone becomes a new regular driver, and it can decline a claim if you do not (Tower). |
| Speeding ticket, or a condition added to the licence | Tower's wording requires you to tell it immediately about a driving offence or a special licence condition, and it may change the terms or premium (Tower). |
| Food delivery or rideshare | Tower says its private policies cover driving to work but not using the car for work, and that rideshare such as Uber is not covered (Tower's car insurance page). The wording also requires you to tell Tower if anyone starts delivering food, people or packages (Tower). |
Extra excesses, named drivers and the under 25 option
An excess is the part of a claim you pay yourself. Tower says an additional excess may apply depending on the type of car and the age of the people insured (Tower's cost guide), and its wording lists additional excesses for an inexperienced driver, for someone on an international licence (with some countries excepted) and where an underwriting excess has been applied (Tower's comprehensive wording). The wording does not define "inexperienced driver" and the amounts sit on your certificate of insurance, so read the certificate to see who it catches.
Tower covers anyone driving with your permission, unless you choose the optional benefit "No cover for drivers under 25 years old". With that option there is no cover while the car is driven by, or in the care or control of, anyone under 25 (unless that person has stolen it), and the premium is worked out on older drivers only (Tower's comprehensive wording). Tower says excluding young drivers may lower the premium (Tower's cost guide), but it only works if no one under 25 ever drives the car, including a younger sibling or a friend.
Consumer Protection says naming specific drivers can lower the premium, but warns against letting anyone unnamed drive (Consumer Protection). Tower says to list every driver who will use the car at least once a month, up to five regular drivers, including a young driver who uses a parent's car (Tower's guide to what you need). If you do not tell Tower about a new regular driver, it can decline a claim or cancel or avoid the policy, which is then treated as if it had never been taken out (Tower's comprehensive wording).
Ways to pay less without cutting the cover that matters
- Match the cover to the car. Consumer Protection says lower value cars suit third party, or third party, fire and theft, while comprehensive pays out for the widest range of situations (Consumer Protection).
- Pick an excess you could pay on the day. A higher excess can lower the premium, but Consumer Protection says to think about how easy it would be to pay first (Consumer Protection).
- Keep the record clean. Consumer Protection says a clean licence and no claims make the biggest difference (Consumer Protection), and NZTA says demerits on a restricted licence can each add six months before a full licence (NZTA restricted licence rules).
- Shortlist cars with insurance in mind. The type of car plays a big part in the price (Consumer Protection), and NZTA says to choose the safest car you can afford (NZTA on restricted drivers), so get quotes on the shortlist before you buy.
QuoteHub's guide to paying less for car insurance covers garaging, alarms and extras. The car insurance guide compares the three cover levels, with separate guides to third party car insurance, comprehensive car insurance and Tower's car insurance.
Getting a quote from Tower online
Have the car's registration number ready, plus where it is parked, your licence type, claims history and every regular driver. QuoteHub's link opens Tower's online quote, which is Tower's own quote tool, so the answers you give there set the price. Other insurers sell cover for young drivers too, so the same questions are worth asking anywhere you quote.
Questions people ask
Do young drivers have to have car insurance in New Zealand?
No. Drive, the learning site created by NZTA and ACC, says car insurance is not a legal requirement but some type of cover is a good idea, because it protects you from financial loss if a crash damages your car or someone else's (Drive). ICNZ says third party, which covers damage you cause to other people's vehicles and property, is the least expensive type (ICNZ).
Should a young driver be on a parent's policy or buy their own?
Tower says anyone with a valid New Zealand licence, whether learner, restricted or full, can buy car insurance if they disclose their licence type, and that a young driver using a parent's car should be listed as a regular driver (Tower's guide to what you need). Which route prices lower depends on how the insurer rates the driver and car, so quote both. Drive says to check with your insurer before a learner practises in your car (Drive).
When does car insurance get cheaper for a young driver?
ICNZ describes young drivers as usually under 25, and Consumer Protection links higher premiums to being under 25 or not holding a full licence (ICNZ, Consumer Protection). How far the price moves at either milestone is each insurer's decision, so the only way to see Tower's is to get a quote.
Does a modified or older car change what Tower covers?
It can. Tower's comprehensive wording says the policy does not cover a car with modifications that differ from the manufacturer's specification, such as modified suspension, unless they are agreed under the accessories and modifications option and listed on the certificate (Tower's comprehensive wording). It also asks you to keep the car at a standard that would pass a Warrant of Fitness, although an expired WoF does not automatically mean a declined claim, because Tower checks whether poor maintenance contributed (Tower's uninsured car guide).
Adviser's view
QuoteHub's read: what matters most for a young driver is staying inside their licence conditions, because Tower's wording excludes cover when a driver is outside them.
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QuoteHub is a Tower partner. If you buy through this link, Smiths Insurance & KiwiSaver may receive a commission from Tower. Buying online is not financial advice.
Cite this page QuoteHub NZ (2026). Car Insurance for Young Drivers in NZ: Under 25s Explained. www.quotehub.co.nz/car-insurance/car-insurance-young-drivers-nz. Updated 2026-10-07.
References
- ICNZ, motor insurance
- Consumer Protection, car insurance
- ACC, Road to Zero
- NZTA, young drivers
- NZTA, how to get a learner licence
- NZTA, how to get a restricted licence
- NZTA, how to get a full licence
- NZTA, changes to getting a car licence
- NZTA, restricted drivers
- Drive, information for coaches
- Tower, car insurance
- Tower, comprehensive wording (09-24)
- Tower, what affects car insurance costs in NZ?
- Tower, what you need before insuring your car
- Tower, can I drive an uninsured car?
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