Have you ever stopped to consider whether your home, car, and contents insurance in New Zealand truly provides the benefits you're paying for?
In the often-overlooked world of insurance, it’s easy to miss important details like policy wording, hidden exclusions, or optional benefits such as roadside assistance. Many Kiwis may unknowingly make costly mistakes when managing their insurance, especially in the current economic climate.
With the cost of living rising by 5.4 percent in the 12 months leading up to the June 2024 quarter, not effectively managing your insurance may place significant strain on Kiwi household budgets. As we’ve shown, the average cost of insurance has increased, especially for car insurance, which rose by 19% over the year ending June 2024. This makes it crucial for Kiwis to manage their insurance policies.
In this blog post, we speak with Justin Lim, founder and CEO of Quashed, to explore some of the most common insurance mistakes New Zealanders make—and how to avoid them.
1. Not knowing if you're covered (and what for)
Remember that home or car insurance policy you were sold ten years ago? If you haven't checked in a while, it’s worth reviewing whether the policy is still in force and if it provides the cover you need. You may have policies with benefits you’re unaware of—big and small.
"People may miss out on claiming benefits they’re paying for simply because they’re not aware of them,” says Justin Lim, CEO of Quashed. "To stay on top of your cover, sign up and upload your policy documents to Quashed, then use Market Scan to analyse your policies."
Take action: Sign up to Quashed now to review your policies and make sure you’re making the most of your cover.
2. Not knowing how much you're paying
It’s easy to lose track of what you’re paying for home, car, and contents insurance simply because you have multiple policies with different insurance providers.
If you sign up with Quashed, you can upload your policy documents and track your insurance to avoid paying too much, especially for motor or car insurance, which has become a lot more expensive recently.
“A typical family would have insurance with AA, AIA, and Southern Cross,” Lim explains. "It’s always going to be spread across multiple insurers because no one does it all." With Market Scan, you can compare your policies online, saving you time, money, and hassle.
Key point: Sign up and upload your policies to Quashed, then use Market Scan to discover how much you could save across different insurers.
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!
3. Not choosing the right excess and sum insured for your needs
When it comes to selecting the right excess for your insurance policy, many people tend to overlook this crucial decision. The excess you choose can significantly impact your premiums and out-of-pocket expenses in the event of a claim, especially in cases of accidental damage. Opting for a higher excess may lower your premiums, but make sure it's an amount you can afford to pay if needed.
Justin Lim advises, "It's essential to strike a balance between your excess amount and what you can comfortably manage financially. Don't automatically choose the highest excess thinking it will save you money in the long run.”
Ensuring you have the right sum insured for your house and contents is crucial to avoid being underinsured or overpaying for insurance. In the event of a claim, having an accurate sum insured will ensure you are adequately covered without paying more than necessary.
Lim highlights, "Many people underestimate the value of their assets when determining the sum insured for their house and contents. This can lead to financial strain during a claim if the cover is insufficient."
Tip: Check your excess and sum insured regularly using Quashed to make sure your cover and costs align with your current needs.
4. Not reviewing policy exclusions and/or loadings
If you have life or health insurance, there might be exclusions or loadings applied to your policy. For instance, if you were a smoker when you took out the policy, you could be paying higher premiums.
Check your policy schedule or renewal letter to see if any of these apply and whether there's a review date. If you're unsure, reach out to your insurer. If you've been smoke-free for 12 months, you can complete a declaration to have your policy reassessed.
Tip: Carefully read your policy for greater peace of mind.
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Insurance just got way easier with Quashed. Compare, shop and track all your insurance in one place.
5. Not checking credit card insurance benefits
If you have a credit card, check if it includes inbuilt benefits such as travel insurance, rental car excess protection, extended warranty, or purchase protection against accidental loss, theft, or damage for most personal items and accessories purchased.
Tip: Once you've signed up to Quashed, use the 'add card' feature to select your credit card and view the free insurance benefits, along with your other policies.
6. Forgetting about insurance benefits provided by an employer
It's worth checking whether you receive free or discounted insurance through your workplace, such as life insurance and health insurance.
"For some corporate health insurance schemes, if you sign up within the first month of starting with the company, your pre-existing conditions would also be covered," Lim says.
Tip: The Quashed platform allows these covers to be added - some employers are already added to the platform and can be selected with a drop-down box.
7. Not taking advantage of the 'free look' period
Most policies have a 'free look' period over the first seven or 14 days, during which the policy can be cancelled for a complete refund.
Tip: If the first premium has been deducted from your account and you cancel the policy within the free look period, ask for a refund.
Market Scan quotes are direct from insurers
So you won’t pay more with Quashed
8. Not getting a pro-rata refund when you cancel
If you’ve paid your premium annually and decide to cancel your policy partway through, you could be entitled to a pro-rata refund for the unused portion of the cover.
For example, if you paid $1,500 for comprehensive insurance for a Toyota Aqua but switched after 6 months, you could be entitled to a refund of $750.
Tip: Use Market Scan by Quashed to track the premium frequency of your policies and ensure you claim refunds where applicable.
9. Not knowing you can save by paying yearly
Paying annually upfront can be more cost-effective than paying monthly, sometimes saving between 5% and 20%. For example, comprehensive car insurance for a Subaru Forester costs $138.92 per month in Christchurch. However, if paid annually, the total cost would be $1,508, resulting in a saving of $159.
Tip: Quashed Market Scan allows you to test different payment options (e.g., monthly vs quarterly, or annually) to find out how much you could save with different insurers.
10. Not using an expert if you need help
Before cancelling an existing policy or taking out new cover, it's recommended that you understand the difference and impact on your existing cover. You could talk to an expert.
Tip: Once signed up, Quashed allows you to pick a time to talk to an insurance adviser. They can help with things like what insurance you need, policy and price comparisons, and providing simple and transparent information to assist you.
