Paying off a mortgage and not covering yourself for any losses that your investment might face is a huge gamble to take. You are not only gambling on the money that you have already invested, but also your home and future living situation.

Having house insurance means that when the worst happens, you will not be left without a home.

How Much Does House Insurance Cost?

The amount that you pay for house insurance varies depending on multiple factors.

These include:

• Risk profile of your location

• Type, size and age of your house

• Construction materials

• Amount of cover

• Type of cover

• Your claims history

• Amount of excess you are willing to pay

• Whether you have a security system

The table below shows a range of approximate yearly premiums to insure a single-story dwelling with a $1000 excess.

It should be noted that the different premiums reflect slightly different coverage, such as different percentage of inflation/demand surge cover or different excess requirements for natural disaster coverage (more on this later).

But if you’re wondering whether there are other ways of reducing your house insurance premiums aside from choosing the cheapest policy, there are things that you can do while not compromising your coverage.

For example:

• Ask about a no-claims discount. Some insurance companies offer lower premiums to customers who have made no claims, or even just a low number of claims.

• Ask for a higher excess. While this won’t be fun if you end up having to make a claim, most providers offer lower premiums in exchange for a higher excess. So, you can still get the coverage you need, if you’re prepared to pay a little more in the event that you have to make a claim.

• Ask about security alarms. If you have a professionally installed security alarm on your property, this lowers the risk of damage incurred via a break-in. Some insurers will offer lower premiums as a result of this lowered risk.

• Pay annually rather than in instalments. Most forms of insurance have lower premiums for annual payments as opposed to fortnightly or monthly.

How Much Should I Insure my House for?

When deciding how much to insure your house for, there are multiple factors to consider. You should insure your house for the total amount that it would cost to rebuild, including the cost of demolition, removal, architect and consent fees. With inflation rates as high as they are, and the cost to build having risen significantly since pre-COVID times, it’s important to make sure that the amount you insure your house for is an accurate representation of what it would actually cost to rebuild.

It could be argued that there is little point in insuring your house at all if you’re not going to insure it for enough. Imagine insuring your house for $500,000 and then finding out that it’s going to cost $750,000 to rebuild. If you can’t find that additional $250,000, then rebuilding could become challenging at best.

However, remember that you’re not insuring yourself for what you paid for the property.

The price you paid at the time of purchase is not the same as the amount that it would cost you to rebuild the house. This is because the purchase price is dependent on several factors such as the housing market, interest rates, and the value of the land. If you insure yourself for the total amount that you paid, you may be over-insuring yourself and paying higher premiums than necessary.

So, when it comes to deciding how much to insure your house for, be sure to get the right advice.

For simple builds such as single-story houses on flat ground, using an online tool such as Core Logic to estimate the cost of rebuild is usually sufficient. However, for more complicated builds such as multi-story buildings or properties on a slope, it would pay to get the advice of a quantity surveyor.

Different Types of House Insurance

Full Replacement Vs. Sum Insured

You might be wondering what the difference is between ‘full replacement’ and ‘sum insured’ house insurance.

‘Full replacement’ means that you aren’t choosing a specific amount to insure your house for, but the policy covers all of the costs involved in a complete rebuild.

‘Sum insured’ means that you are choosing a specific amount to insure your house for, and it’s up to you to make sure that this is enough to cover a complete rebuild.

(Remember, the sum insured value should only reflect the cost to rebuild your house, not the price you paid to purchase the house and land.)

Most insurance companies only offer the ‘sum insured’ option for house insurance. After the Christchurch earthquakes, it became clear how expensive and unpredictable it was to insure houses for full replacement, so this option is less common now.

Market Value

Another alternative is ‘market value’ house insurance. For example, the market value house insurance that AMI offers means that in the event that your property is damaged or destroyed, they will pay either the costs for repair or rebuild, or the market value of the house (excluding the land), whichever is less.

While a market value policy may appear more affordable, it may not be enough to fund a complete rebuild, so you should think carefully or get some advice before deciding.

Different Coverage Options

Aside from the key policy differences described above, the smaller inclusions can vary too. Here are some examples of key differences you should look out for when comparing different house insurance policies:

• Inflation/Demand Surge

• Renovation Cover

• Landscaping Cover

• Retaining Wall Cover

• Excess-free Glass Cover

• Key and Lock Cover

• Stress Benefit Cover

• Alternative Accommodation Cover

• Legal Liability Cover

Aside from these different types of additional cover, you will also want to compare premiums, excess, and whether you are still covered if you go away for an extended period of time (often more than 60 days).

What is Risk-Based Pricing?

Understanding risk-based pricing is important if you want to make sure that the house you’re looking at buying is going to be affordable to insure.

Risk-based pricing adjusts premiums based on the likelihood of a claim being made for reasons such as flooding and earthquakes. This means that your premiums will vary depending on the chance of your area suffering a natural hazard.

For example, if your house is on a steep slope, that may make it more prone to damage from slips and retaining wall failure in the event of a storm or earthquake. If you live near a river or other water body then your property may be considered at risk of flooding or inundation. In Christchurch, the TC rating of the land your house is on will affect your premiums.

It is wise to assess whether a property is going to be considered high-risk before purchasing a new home, and take into account the additional cost of insuring it.

House Insurance Vs. Contents Insurance


A lot of people think of house and contents insurance as one and the same. And it’s true, they are often sold as a bundle. However, they are two separate types of cover and should be considered separately. House insurance effectively covers everything that is fixed to the ground. Contents insurance covers the rest of your belongings or everything you would have to replace if your house burned down. This includes everything from your furniture, electronics and white wear to clothes, bedding and towels.

You may not think that you have much of value in your house, or you may think of a few valuables but not realise the true cost of replacing everything you own. It’s important to remember that while acquiring belongings slowly over a number of years may not feel particularly expensive, replacing them all at once would likely be upwards of $50,000.

The EQC Factor: Am I Covered?


The Earthquake Commission (EQC) is a crown entity that covers New Zealanders for natural disasters.

If you have private house insurance that includes coverage in the case of a fire, you are automatically covered for natural hazards through EQC.

These natural hazards include earthquakes, landslips, tsunamis, volcanic events, other geothermal activity, storms and floods.

This means that you don’t have to pay any extra or take out separate insurance to be covered by EQC. Having a private insurance policy at the time of the natural disaster ensures that you are automatically covered.

How Market Scan Can Help You

It’s a lot to consider, right? We understand.

Market Scan is the quickest and easiest way to ensure that you are getting the best value for money when you purchase house insurance.

Market Scan allows you to compare home insurance policies so that you can choose the premium that fits your budget, while also giving you the coverage you need.

Market Scan lists all of the inclusions side by side so that you can easily compare things like alternative accommodation cover, renovation cover and excess-free glass cover.

If you’d like to read more about house insurance, we have more information here.