Insuring a car might be about to get a lot more expensive, with an increase in car crashes and more expensive high-tech vehicles being blamed for a hike in premiums.

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IAG, which accounts for half the insurance market through its brands such as State, NZI and AMI, said there were more cars on the road, particularly in congested cities like Auckland, which had led to more crashes.

"The greater density means more accidents," IAG National Portfolio Manager Private Motor Judith Harvey said.

"For some people there could be double digit increases."

A larger proportion of newer cars on the roads has also pushed up the costs of fixing damaged vehicles.

The co-owner of Airflowe Panel & Paint, Terry Barker, said replacing bumpers and wing mirrors in new cars could cost five or even 10 times more than for older, simpler models.

"You've got anti-crash sensing things, you've got all sorts of things going inside theses bumpers.

"And you've got to take cars back to dealerships now to get recoded after they've add certain panels taken off. You pull a front bumper off [a vehicle] that would pull an airbag code and you would need to get that cleared," Mr Barker said.

Wellingtonian Elisa Eckford said this year's bill to insure the family car was an eye-opener.

"I received the insurance bill in the post the other day, opened it and worked out that the car insurance had gone up 18 percent from last year, which I was quite surprised about; it seems like a big jump for just one year's difference."

That came despite a fall in the value of the car.

"I couldn't see any obvious reason. It just seemed out of step with the other insurance we were paying and just in terms of previous increases I don't ever remember it going up that much before," Ms Eckford said.

The cost of technology

Insurers say they have no choice but to keep hiking premiums.

"As technology keeps on developing in vehicles, premiums will have to continue to go up because they will become more expensive to repair," Ms Harvey said.

Some fear it might persuade people to forgo insurance.

"I think it's inevitable that people with cheaper cars are simply going to say I can't afford this, so they'll take the risk for themselves," Dog and Lemon editor and motor safety campaigner Clive Matthew-Wilson said.

Mr Matthew-Wilson said these people should be smart and have third-party insurance so if they hit a Rolls Royce or a Mercedes they did not end up going bankrupt.

Industry figures show total premiums for commercial and private vehicles rose 5.1 percent to $1.6 billion in the year to September 2016, compared with the previous year.

Earnings fell 4.6 percent to $1.38bn over the same period, while claims remained flat at $1bn.

That pushed the loss ratio up to 74 percent from 70 percent in the previous year.