ACC covers accidents. Full stop.
ACC is New Zealand's accident compensation scheme. If you're injured — at work, at home, playing sport, in a car — it covers treatment costs and can pay a portion of your income while you recover. It's genuinely one of the better social safety nets in the developed world.
But it only covers injury. If you're off work because you're unwell — cancer, a heart condition, a mental health issue, a bad back that isn't from an accident — ACC generally doesn't apply. That's a much bigger gap than most people realise.
Most time off work isn't from accidents
The numbers on this are consistent internationally: illness accounts for far more lost work time than injury does. Cancer, mental health conditions, cardiovascular disease and musculoskeletal issues (that don't stem from accidents) make up most long-term absences.
So if your only safety net for being unable to work is ACC, you're covered for a minority of the risk. That's fine if you're aware of it and comfortable. It's not fine if you've assumed ACC would catch you either way.
Where income protection fits
Income protection insurance pays a monthly benefit if you can't work due to illness or injury. It sits alongside ACC rather than replacing it — if you're off due to an accident, ACC typically pays first and the policy tops up or bridges gaps.
The important levers are the waiting period (how long before the policy starts paying), the benefit period (how long it will keep paying), and the definition of disability (own occupation vs any occupation). Those three choices change the price and change the value quite a lot.
Self-employed people especially need to look at this
If you're a PAYE employee, your employer's sick leave provides a small buffer. If you're self-employed or contracting, that buffer is zero. Your income stops the day you can't work, and ACC only helps if it's an accident.
That's why income protection is usually one of the first covers advisers look at for self-employed clients. The maths shifts sharply when there's no employer sick leave in the picture.
Getting the fit right
Because ACC is already covering the accident side, income protection can often be structured to sit efficiently alongside it rather than duplicate the cover. Insurers offer offset options and ACC-integrated designs that trim the premium.
This is general information, not personalised advice. Your situation is its own thing — the right answer for you depends on the details. Have a chat with one of our advisers and we'll walk you through it.