Owning a home is one of life’s big milestones for Kiwis. But protecting it with the right house insurance is critical, and let’s be honest—it’s often a bit of a headache. With rising premiums, complicated policies, and different options, it’s easy to feel overwhelmed. In this blog post, we break down the key considerations for house insurance in New Zealand so you can confidently make decisions that save money and protect what matters most.
1. Why do you need house insurance?
Your house is likely your biggest financial asset, and house insurance acts as your safety net. From natural disasters to accidental damage, the right policy ensures you’re not out of pocket for massive costs. Standard house insurance policies in New Zealand typically cover:
Rebuild costs: Covers demolition, debris removal, and rebuilding your home.
Natural disasters: Includes EQC coverage for earthquakes, floods, and landslips (up to $300,000).
Liability protection: Helps with legal costs if someone is injured on your property.
While this may sound straightforward, exclusions like gradual damage (e.g., leaky pipes) or wear and tear are common, so it’s crucial to understand what’s covered.
Want to protect your home? Get the basics of home insurance in our practical guide.
2. How much does house insurance cost, and why?
House insurance prices differ depending on where you live, your home’s features, and the choices you make with your policy. On average, New Zealanders pay $2,702 per year, but that number is climbing—premiums have jumped 17% over the past year.
Here’s what influences the cost:
Location:
Wellington: Earthquake risk makes it the most expensive, with premiums averaging $4,467 a year.
Auckland: The cheapest region, with an average of $2,104 annually.
House features: Older homes or those built with materials considered high-risk are more costly to insure.
Policy settings: Your sum insured and chosen excess can make a big difference to your premium.
Trying to figure out the best house insurance? Check out our guide for simple tips to compare quotes and pick the right cover.
3. What is sum Insured, and why is it important?
In New Zealand, most house insurance policies use a “sum insured” model. This is the maximum amount your insurer will pay to rebuild your home if it’s completely destroyed. While it seems straightforward, setting the wrong amount could leave you financially vulnerable—or paying too much.
Why is sum insured so important? Think of it as the backbone of your policy.
Too low? You may not have enough to rebuild. For example, if your rebuild costs $500,000 but your sum insured is $400,000, you’ll have to cover the $100,000 gap.
Too high? You’re likely paying more in premiums than necessary.
How do you calculate the right sum insured?
Getting it right takes careful planning and, ideally, expert advice:
Cordell Sum Sure calculator: Many insurers offer access to this tool, which uses industry-standard data to estimate rebuild costs.
Consult professionals: For unique or high-value properties, a builder or quantity surveyor can provide a tailored assessment.
Annual reviews: Building costs fluctuate due to inflation and labour or material shortages. Adjusting your sum insured each year ensures you stay on track.
What should you include?
Demolition and debris removal: These costs can be significant and are often overlooked.
Professional fees: Architects, engineers, and surveyors are essential in a rebuild.
Unique features: Pools, retaining walls, and high-end finishes need to be factored in.
What happens if you get it wrong?
Underinsurance: A rebuild could leave you tens of thousands of dollars short, which is a common problem for homeowners in New Zealand.
Overinsurance: While less risky, it means paying more in premiums without any added benefit.
4. How can you save on house insurance?
Feeling squeezed by rising costs? Here’s how to keep premiums in check:
Increase your excess: Raising your excess from $1,000 to $2,000 could cut premiums by up to 20%.
Personalise your cover: Pay only for what you need. If you don’t have retaining walls or a pool, don’t insure them.
Compare policies: Kiwis save an average of 8–10% annually by shopping around and finding the right fit.
Noticed your house insurance costs going up? You're not imagining it! Read our blog Why Are House Insurance Premiums Increasing? to find out what’s behind the hikes and what it means for you.
5. What are the common pitfalls to avoid?
It’s easy to overlook details in your policy, but mistakes can be costly. Avoid these common pitfalls:
Underinsuring your home: If your sum insured is too low, you’ll be out of pocket if a rebuild exceeds your coverage.
Ignoring exclusions: Understand what’s not covered, like gradual damage or long-term wear and tear.
Are you making simple insurance mistakes that could be costing you? Find out in Ten Insurance Mistakes That Cost You Money and learn how to avoid them. Your wallet will thank you!
6. How can Quashed help you simplify house insurance?
Sorting through insurance policies doesn’t have to feel like a full-time job. Quashed makes it easy:
Real time comparisons: Check out policies side-by-side in just minutes.
Personalised Options: Tailor your sum insured and excess levels to suit your needs and budget. Want to see how we stack up against other tools? Check out MoneyHub Insurance vs. Quashed Insurance to learn more.
No Jargon: Forget the confusing terms—Quashed breaks down policies so you’ll always know what you’re getting.
Looking for more ways to save? Check out our blog 8 Budget Hacks for House Insurance for practical tips to cut costs without cutting corners.
7. How often are you going to review your policy?
Insurance isn’t a “set and forget” thing. Life changes, and so do your insurance needs. Reviewing your policy annually helps ensure you’re not overpaying or leaving yourself underinsured.
Questions to ask during a review:
Have you made any renovations or upgrades that might affect your coverage?
Are you paying for extras you no longer need?
Have your premiums gone up without a clear explanation?
Want to dive deeper into smart insurance decisions? Check out our guide for first-time home buyers to stay ahead of the curve.
The average Kiwi household can save
$2,023.79 a year by shopping their insurance!
Find out how your renewal prices stack up against other options out there!
Your home, your peace of mind
House insurance is essential to safeguarding your biggest asset, but it doesn’t have to be overwhelming. By focusing on key factors like sum insured, exclusions, and regular policy reviews, you can save money while staying protected. And with Quashed, getting the best coverage for your home is quick, simple, and stress-free.
Shop smarter with Quashed
Insurance just got way easier with Quashed. Compare, shop and track all your insurance in one place.
FAQs
What is the most common type of house insurance cover in NZ currently?
The most common type of house insurance in New Zealand is based on the "sum insured" model. This approach requires you to set the maximum amount your insurer will pay to rebuild your home in case of a disaster. It replaced the "full replacement" model after the Canterbury earthquakes and gives homeowners more control, though it’s crucial to get the sum insured calculation right.
What is the most trusted insurance company in New Zealand?
While trust in an insurer can vary depending on individual experiences, some of the most widely recognised and trusted insurance providers in New Zealand include AMI, State, and AA Insurance. However, the best insurer for you depends on your needs. Quashed helps you compare policies side-by-side to find not just the most trusted, but the one that offers the best fit for your situation.
What is the cheapest insurance company for homeowners?
There’s no single "cheapest" insurance company, as premiums vary based on factors like location, house characteristics, and the level of cover you choose. The best way to find affordable house insurance is to compare policies and customise your options (e.g., raising your excess). Quashed makes this easy by providing real-time quotes and helping you find savings without sacrificing coverage.
Why should I use Quashed to compare house insurance?
Quashed makes finding the right house insurance simple and stress-free. We provide real-time quotes and side-by-side comparisons, so you can easily compare coverage options, premiums, and excess amounts all in one place. No more switching between multiple websites or feeling overwhelmed by too many choices.
What makes Quashed different from other comparison tools?
Quashed is designed to make insurance simple and user-friendly. Unlike other platforms, we offer real-time quotes and side-by-side comparisons, so you always have the most up-to-date options at your fingertips.
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