Most homeowners in New Zealand have some form of insurance for their property. To put it simply, house insurance covers up to a specific amount (called the sum insured) that is the amount payable if you were to lose your home.
What is the sum insured?
The sum insured value is one of the most important values you need to identify when insuring your home. In New Zealand, house insurance is based on the rebuild cost of your house, and this rebuild cost is what is known as your sum insured. Your sum insured also includes features such as fences, swimming pools, paving, and sheds.
The sum insured value is typically the maximum amount your insurer will pay to rebuild your home, in the event that it is severely damaged, for example during a natural disaster.
It is your responsibility to provide your insurer with the sum insured amount for your house, and it is also your responsibility to keep this up-to-date if you undertake any renovations or alterations.
How do I calculate my sum insured?
Since your sum insured value is such an important value when purchasing house insurance, it is important to get it right.
There are a number of ways to determine what the value of your home may be. The most common is using the Cordell Sum Insured Calculator. Alternatively, a builder, quantity surveyor, architect, or home valuer will be able to provide you with an estimated rebuild cost for your house. Here are a few helpful links to get you started:
- New Zealand Institute of Valuers
- New Zealand Institute of Quantity Surveyors
- Registered Master Builders
As mentioned earlier, your sum insured value needs to take into account more than just rebuilding the house. Below are a few extra things you should be keeping in mind when determining your sum insured.
Landscaping: Driveways, paving, water tanks, retaining walls, tennis courts, septic tanks, decks, fencing, pools
Outbuildings: Garages, carports, pool houses, sheds
Interior Fittings: Windows, heating, flooring, insulation
You also need to take into account demolition costs and site clearance costs, which are required to get your land in a condition suitable to build your new home on.
Why do I need house insurance?
An incident involving your home is one of the toughest events to bounce back from financially. Often the damage is in the tens of thousands of dollars, if not the hundreds of thousands. The consequences of not having house insurance, and experiencing damage to your property, can set you back a lot of time and money.
Being in the insurance industry, we are aware that accidents around the home can and do happen. Whether it is a burst pipe resulting in water damage, or a kitchen fire requiring a major rebuild, accidents are always a possibility.
With house insurance you are buying peace of mind in knowing that should you be faced with damage at your home, you will have support from your insurer in not only paying for repairs, but also organising the repairs.
Where do I buy the best house insurance in New Zealand?
Much like other forms of insurance, every house insurance policy in New Zealand is different in some way. This means that shopping around to buy the cheapest house insurance policy you can find more than likely means you are not comparing apples with apples.
Each insurer offers different types of cover, and a range of optional extras which may or may not interest you.
The best house insurance policy for you can only be determined by your own personal situation, and the support you need during such an event.
As a bare minimum, it will be wise to find the policy which most closely returns you to the situation you were in before the loss event occurred. This means repairing your home to the same condition it was in before the damage happened.
Then, depending on your appetite for optional extras, you can make the call on whether you value add-ons such temporary accommodation or cover for retaining walls. Only you can decide if paying more in premium for these features is a good choice. For example, you may need the temporary accommodation benefit, whereas others may have family nearby they can live with while their house is being repaired.
So to put it simply, there is no such thing as a “best house insurance policy”. They are all different, with different features which appeal to different people. What you consider the best house insurance policy for you, may not be adequate for someone else in different circumstances.
The good news is that getting a house insurance quote is easier these days with advances in technology and online experiences. You are able to quickly compare house insurance policies online and decide what is best for you.
How can I get cheaper house insurance?
A common question we get is how can you get cheaper house insurance. As with all purchases, you get what you pay for in most cases, and house insurance is no different. House insurance is designed to protect one of your most valuable assets when things go wrong, and choosing a house insurance policy based purely on price may not be the best idea.
Look for a policy that provides you with adequate cover, and with the policy benefits that you need based on your own personal situation.
However if you do want a quick and easy way to get cheaper house insurance you could look at increasing your excess. Increasing your excess will result in a lower monthly premium, and your excess is only payable in the event that you need to make a claim.
The content presented on this page is provided for informational purposes only. Cove Limited makes no representations or warranties as to the accuracy, completeness or timeliness of the information. Each person should consult a qualified advisor for advice specific to their circumstances. Cove Limited assumes no liability for actions taken in reliance upon the information contained herein.