Tyre and rim insurance

Added protection or unnecessary cost?

If you buy a car from a dealership, you might be offered tyre and rim insurance to protect these parts of your car. Here we explain what these policies cover, and why they might not be good value.

What is tyre and rim insurance?

Tyre and rim insurance is an add-on insurance policy that a car dealer might offer you when you buy a car. It covers damage to tyres and rims as a result of blowouts, punctures and various road hazards (like driving through a pothole). Unlike comprehensive insurance, tyre and rim cover does not usually cover for damage that occurs as part of an accident. Also, general wear and tear is typically excluded.

Do I need tyre and rim cover?

Before you buy this type of policy, work out how much it would cost to pay to repair or replace your tyres if they were damaged. Depending on the type of car you have, the cost of repairing or replacing your tyres and rims might be a lot less than the cost of the insurance policy.

Is tyre and rim insurance worth it?

Tyrerim Infographic ThumbnailOur tyre and rim insurance infographic explains in pictures what this insurance really covers, the average cost and claim, and explains some things to consider before you buy it.

What to ask the dealer before getting tyre and rim insurance

Here are some things to consider if a car dealer offers you a tyre and rim policy: 

  • Cost - Tyre and rim insurance policy premiums are often packaged into your car loan. Because you pay interest on the premiums, the insurance is even more expensive and the amount you have to borrow is higher. Ask for the full cost of the premium, including the cost of any interest payable if it is added to your loan. 
  • Inclusions, restrictions and exclusions - Tyre and rim insurance only covers you for a limited range of situations. Find out what is - and is not - covered. Make sure the coverage is worth the cost.
  • Coverage period - Find out how long you will be covered for.
  • Commission - Car dealers who sell these policies receive a commission on the sale. Ask the car dealer how much commission they'll get if you buy the insurance policy.
  • Cooling-off period - How long is the cooling-off period? Then you know how much time you'll have to cancel the policy at no cost.

The MoneySmart Cars app can help you work out the real cost of buying a car and crunch the figures on add-on insurance.

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How to make a claim, cancel or complain about tyre and rim insurance

See our add-on insurance webpage for details on how to make a claim on your insurance policy, cancel it or make a complaint. 

There are a lot of decisions to make when it comes to buying a car. Before you buy tyre and rim insurance, make sure you understand what the policy costs and what it includes.

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Last updated: 04 Feb 2019