An 8-year-old girl lost her mother and was seriously injured when a freight train hit the family's ute, flinging it 20 metres.
The girl's 63-year-old uncle, also in the ute, had to be airlifted to hospital.
The accident happened yesterday at a railway crossing in Stratford, Taranaki.
The crossing has been identified as a danger spot, and is due to have warning lights and bells installed.
Nearby residents said the crossing was an accident waiting to happen.
The crash site is beside the site of the annual Taranaki A&P show, which the family had driven from their farm to attend.
The woman who died at the scene was Antoinette Hess, 48.
The show continued despite the accident, but a woman who attended said the community was in shock.
"It definitely hurt. We're really just one big family," she said.
Police walked through the crowd to tell Ms Hess' relatives.
A witness said the ute was crossing the railway tracks about 9am when the 29-carriage train hit its tray.
The ute was flung down a bank, landing on its roof.
Cars on the main road stopped and motorists rushed to help.
The girl was quickly pulled out with marks of a blow to her forehead, but the two adults were trapped in the vehicle.
Taranaki community rescue helicopter pilot Steve Batchelor, who flew the injured man to hospital, said the train had taken almost 600m to stop.
KiwiRail spokeswoman Cathie Bell said it could have travelling as fast as 80km/h.
Police, ambulances and the Fire Service arrived at the crash site while Ms Hess was still alive.
The fire rescue team worked frantically to release her, and paramedics treated the 8-year-old girl and her uncle before they were taken to hospital.
The crossing has been the scene of at least four previous crashes, the most recent in December 2008.
The worst was a fatal collision in 1992, when a baby was flung from a car upon impact.
A resident across the road said she had to drive almost on to the railway tracks before she could see whether a train was coming from one of the directions.
"I've been waiting for it to happen," said neighbour Des Rowe.
"We've often talked about how one day there's going to be a fatality."
Ms Bell said the crossing was on a priority list to get warning bells and lights installed within five years.
In light of yesterday's fatal crash, the upgrade would be fast-tracked to be completed by the end of next year, she said.
A Transport Ministry spokesman said the country had no fatal collisions between cars and trains at level crossings last year.
But Ms Bell said New Zealand's 1400 crossings had an average of 27 crashes every year.
A recent survey counted 79 near misses on level crossings since August, 80 per cent of them at crossings with lights, bells or barrier arms.
A fifth happened after drivers deliberately drove around a lowered barrier, Ms Bell said.
"It's appalling. We would like to remind people to stop at level crossings. The signs are there for a reason," she said.
Senior Sergeant Darin Haega said it was still unclear who had been driving the ute. He said the incident underlined how important it was to stop at railway crossings.
Mother dies after train flings ute 20m at danger crossing
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