Understanding the most common insurance claims in NZ's motor trade can help you take steps to reduce your risk — and make sure your insurance coverage is properly structured before you need it.
Claim #1: Vehicle Stock Theft
Vehicle theft is the single most frequent cause of insurance claims for NZ car dealers. Organised criminal groups specifically target used car yards — particularly those with high-demand stock like Japanese utes and SUVs.
Why it happens: Many NZ car yards operate with minimal after-hours security. Open forecourts with good road access and limited CCTV coverage are particularly vulnerable.
What it costs: A single theft event can involve multiple vehicles. Average per-vehicle claims range from $15,000 to $50,000+ for late-model Japanese imports.
Prevention:
Insurance response: Vehicle stock cover responds to theft events. Check your policy conditions — some require specific security measures as a condition of cover.
Claim #2: Workshop Fire
Workshop and garage fires are among the most financially devastating events in the motor trade. Spray booths, chemical storage, welding activities and electrical faults all create significant ignition risk. Once a fire starts in an enclosed workshop, it spreads rapidly.
Why it happens: Most workshop fires result from chemical ignition (solvents, paints), welding sparks, or electrical faults — often starting outside working hours.
What it costs: A serious workshop fire can total the building, equipment, and multiple customer vehicles simultaneously. Losses regularly exceed $300,000–$500,000.
Prevention:
Insurance response: Property insurance covers building and equipment. Customer vehicles cover addresses vehicles in your care. Business interruption covers the revenue loss during repairs.
Claim #3: Customer Vehicle Damage
A customer's car damaged while in your care — whether by a workshop accident, theft from your yard, or a road test incident — is one of the most frequent claims for NZ repair garages.
Why it happens: Busy workshops with multiple vehicles, time pressure, and staff working on unfamiliar vehicles create conditions where accidents happen.
What it costs: Average customer vehicle claims range from $2,000 to $60,000+ depending on the vehicle value and extent of damage.
Prevention:
Insurance response: Customer vehicles cover (bailee's liability) is specifically designed for this scenario.
Claim #4: Faulty Workmanship Disputes
Claims that a repair was done incorrectly — or not done at all — account for a significant portion of motor trade professional indemnity claims. The Motor Vehicle Disputes Tribunal handles hundreds of such disputes each year.
Why it happens: Under NZ's Consumer Guarantees Act, all repair services must be carried out with "reasonable care and skill." Even experienced mechanics make mistakes, and complex vehicles leave more opportunities for errors to present.
What it costs: Disputes Tribunal awards range from a few hundred dollars for minor issues to $20,000+ for major repair failures. Legal representation typically adds $3,000–$8,000.
Prevention:
Insurance response: Professional indemnity covers Tribunal proceedings, legal representation and any ordered remedies.
Claim #5: Third-Party Property Damage
A customer's vehicle rolling off your premises and hitting a neighbouring property, a vehicle being moved within the workshop and striking another car, or an employee driver clipping a parked vehicle — third-party property damage is a frequent motor trade liability claim.
Why it happens: High-traffic commercial properties, staff driving unfamiliar vehicles, and congested workshop spaces create frequent opportunities for minor incidents.
What it costs: Minor incidents cost $2,000–$10,000. Major incidents — a rolling stock vehicle crashing into a showroom or neighbouring building — can exceed $100,000.
Prevention:
Insurance response: Public liability covers third-party property damage. Road risk covers incidents on public roads during authorised driving.