Owning a home is one of life’s biggest milestones for Kiwis. However, protecting it with the right house insurance is critical, and let’s be honest, it can be a bit of a headache. With rising premiums, complex policies, and various 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 most valuable financial asset, and house insurance serves 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 vary based on location, home features, and policy choices. According to the Quashed Index, New Zealanders pay an average of over $2.7k per year, with costs trending upward over time. 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.
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 should be included.
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’ average savings can range from 8–10% annually by shopping around.
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.
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.
No Jargon: Forget the confusing terms—Quashed breaks down policies so you’ll always know what you’re getting.
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?
Time to sort your house insurance?
With rising house insurance premiums, it’s a good time to explore your options.
Quashed makes it simple to compare insurers and see what fits your needs.
Further reading
Check out these related articles to dive deeper into important topics and make informed decisions.
House Insurance Guide: A comprehensive look at coverage options and what to consider.
Why House Insurance Premiums Are Rising: Discover what’s driving costs and how to manage them.
How to Compare House Insurance Quotes: Tips to help you choose the right policy for your needs.
Climate Change & House Insurance: Learn how climate risks are affecting insurance costs in NZ.
The Average Cost of House Insurance in NZ: Find out what Kiwis are paying and how to get the best value.
Budget-Friendly House Insurance Tips: Smart ways to lower your premiums without compromising cover.
FAQs
What is the cheapest insurance company for homeowners?
There’s no single "cheapest" insurance company, as premiums depend on factors like location, house type, and coverage level. The best way to save is to compare policies and customise options like your excess. Quashed simplifies this process by providing real-time quotes and helping you find savings without compromising 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 review 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.
