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
What is tyre and rim
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
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?
Our 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
- 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.
Work out the real cost of buying and running a
MoneySmart Cars app
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
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.
Last updated: 04 Feb 2019