We have ACC, do we really need insurance?

11 June 2021

New Zealanders have access to a support system that is the envy of many other parts of the world.

Every person in this country is covered by ACC, a no-fault scheme that covers medical costs and, depending on the situation, loss of income if you suffer an accident. The accident doesn’t have to have been suffered at work for your income to be covered.

You can even be covered for treatment here after an overseas accident, depending on how long you were away. ACC may also provide for your family if you are killed in an accident; this may happen in several ways.

So how does the scheme work, and does it mean you don’t need your insurance?

Illness is more common

While accidents are more likely to make the news, the probability is higher that you will be off work for a significant period of time because of illness than because of an accident.

Cancer, for example, is one of the leading causes of an insurance claim and ACC won’t cover it.

The reality is, ACC is not designed to cover you if you’re unable to earn money because you’re unwell, or if you need treatment in the private health system, or expensive medications for a health condition.

It also doesn’t cover mental injuries in the same way it does physical ones. In those cases, having health insurance in place can make all the difference, picking up the bill and allowing you to focus on your recovery.

ACC won’t cover your entire income

Another good reason to consider taking out insurance is that ACC only pays up to 80 per cent of your gross salary.

That’s a great safety net but still a significant pay cut if you’re off work for a long period of time. Some mortgage and insurance expenses policies may be able to cover the difference; talk to us if you’d like to explore your options in more detail.

You might not have the cover you expect

Sometimes claims to ACC are declined because of degenerative or existing conditions – in these instances, it can be helpful to have your own cover in place as a backstop (although you’ll still need to have taken it out before those conditions arose).

Having your own insurance in place also sets some parameters around what you can expect and give you peace of mind that your family’s financial future is protected, depending on the level of cover you put in place.

Need advice?

We can help you work out whether your insurance is structured properly for your needs and whether you have adequate cover. Give us a call today.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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