Car insurance premiums have sky rocketed up 38 per cent in two years, according to a Consumer NZ survey.

The independent non-profit organisation is urging people to research different providers because switching may help save hundreds of dollars per year.

The car insurance premium survey found changing companies could save almost $700 a year on average for a family of four.

Consumer NZ investigative team leader Rebecca Styles says the ballooning of costs came down to multiple factors.

"The extreme weather events, the Auckland floods, claims from that, as well as the Cyclone Gabrielle and rising inflation, the cost of repairs is going up ... they're all factors in the increasing prices.

"We surveyed four scenarios and the family of four, the medium price had increased the most for them, it went up 38 per cent since 2021. For other scenarios, older person it went up 24 per cent, for a middle aged person 21 per cent and then for a younger person it's gone up 30 per cent since our 2021 survey."

The survey also found the increase in payments means a growing number of people are starting to go without it because it's getting too expensive.

"We are starting to see some people choosing not to insure their vehicles, so in 2022 when we asked the question people are going without insurance just 2 per cent said they were but this year it had gone up to 10 percent - so it is a worrying increase of people going without car insurance."

The type of car a person drives will also influence the insurance premium and some people do not know the difference between full insurance and third party, which may be a cheaper option but will not cover a person if they get into a crash.

"Maybe people don't quite realise the difference between comprehensive and third party and third party fire and theft, which offers a little bit more protection than third party. Obviously the comprehensive gives you the most cover but there are those other options there if comprehensive insurance is becoming unaffordable."

Insurance Council chief executive Tim Grafton says there are "a number of factors" that explains increases in motor vehicle premiums.

He says later model cars have more technology in them which makes them more costly to fix.

A sharp increase in motor vehicle claims following the major flooding events earlier this year is another contributor, he says.

The impact the poor state of New Zealand's roads has on vehicles is another, as is the cost of inflation.

Grafton says there has also been an increase in the number of cars stolen due to ram raids.

He believes with the costs coming through for insurers it will be unlikely to see a reduction in premiums.

-RNZ.