NZTA releases new protections against water-damaged vehicle imports

From 7 September, businesses and consumers investing in an imported vehicle will be further protected against safety risks relating to poor water damage repairs, as the New Zealand Transport Agency (NZTA) brings new safety and electronic requirements online.

Could your new vehicle have previous water damage?


Water-damaged vehicles flooding the market

Imported vehicles are big business in New Zealand. In 2015 alone, the NZTA reports that there were over 160,000 used vehicles imported from overseas and added to our domestic fleet, including:

  • 143,500 cars
  • 8,800 commercial vehicles
  • 2,200 motorcycles
  • 840 tractors amongst others

However, while imported vehicles often afford your business greater variety at a cheaper price, they do come with some risks. 

One notorious example is brought up by the Insurance Council of New Zealand (ICNZ): water-damaged cars. According to the ICNZ, it is common for water-damaged vehicles to be imported into New Zealand from neighbouring Australia, vehicles that would otherwise be written-off can become a saleable vehicle without proper compliance checks.

They are supposed to be declared as water-damaged upon arrival and undergo compliance checks and appropriate repairs, but unscrupulous vendors don't always do so. Because there are no obvious signs of this damage, particularly in advanced vehicle systems, they slide into the New Zealand market damaged and dangerous and with buyers often none the wiser.


Risks and costs to business owners

The safety risks are a real concern for anyone who buys a water damaged vehicle. 

  • Electrical component corrosion and electrical connections failure over time
  • Vehicle safety issues after a year or so, for example with safety belt pretensioners, airbags and electrical systems

Your commercial vehicle insurance as part of your business insurance would in most cases cover you for a collision caused by a safety issue.  

Additonally there is the expense of repairing the water damaged components to make the vehicle roadworthy once the latent damage is discovered.  The water damage is often only discovered during collision repairs.



New legislation, new protection

However, thankfully, there are now some more robust protections in place. The NZTA has made it a requirement that "all water damaged light vehicles will now require a full replacement of all electronic and pyrotechnic safety components", including airbags, sensors and seatbelts. With this new legislation, any vehicle that is known to have suffered water damage will get a full work-up to ensure safety standards are kept up to date.

The ICNZ has thrown their support behind this change, with Chief Executive Tim Grafton saying:

"Insurers welcome this change as the importation of water damaged vehicle increases the risk of serious accidents, particularly due to failures in advanced vehicle safety systems."

With these advanced systems becoming more commonplace in the modern automotive industry, this adjustment should also be welcomed by anybody planning to purchase a light business vehicle that is both safe and sturdy.

There are only so many risks that the NZTA can protect your enterprise's fleet from. To ensure you have cover for collisions, theft and other automotive issues, make sure you get in touch with the expert team at Rothbury and enquire about your options for commercial vehicle insurance.

Greg Greenwood

About the Author

Name: Greg Greenwood        

I'm the South Island Operations Manager at Rothbury Insurance Brokers and live in Christchurch.  I have a portfolio of commercial clients, many who have been my clients for years. My experience of earthquake claims and issues is called…
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I'm the South Island Operations Manager at Rothbury Insurance Brokers and live in Christchurch.  I have a portfolio of commercial clients, many who have been my clients for years. My experience of earthquake claims and issues is called upon frequently to assist clients and those needing insurance advice in the region.  I am also the Chairman, Canterbury region for IBANZ (Insurance Brokers Association NZ).


Disclaimer: The articles published on this blog are designed to provide general information and do not take into account any individual’s particular circumstances. We recommend that you obtain professional advice on your requirements before making any decision about a financial product.

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