A couple reading a document and asking questions about it to a young woman

House insurance: terms and definitions

Defining house insurance

Are you finding yourself wondering “How does house insurance work?” We are here to explain. House insurance is a type of insurance policy that covers damage to your home.

There are different levels of coverage that homeowners can go for, ranging from basic to more comprehensive policies. We will explore the options related to house insurance in New Zealand below.

The difference between house insurance, home insurance, and homeowner’s insurance

While the terms are often used interchangeably, there is a difference between house insurance, home insurance, and homeowner’s insurance.

  • House insurance when buying a house is usually mandatory and refers to a policy that protects one’s house.
  • Homeowner’s insurance, or home insurance, is a more encompassing policy that covers more than one’s actual house, including other structures on the property and personal belongings contained within it.

Losses covered by house insurance

What does house insurance cover in New Zealand? House insurance covers losses from perils that might cause sudden and accidental damage to your home. This typically includes the cost to repair, rebuild, or replace your home.

Cutting costs on house insurance

Insurance company

1. Insurance company choice

What to consider when choosing an insurance company

Purchasing insurance for your home can be overwhelming, but it is necessary. To make sure you are choosing the right insurance company, you should consider the following:

  • the company’s history and reputation;
  • the company’s financial strength;
  • the types of coverage offered by the company.

Where to find a trustworthy insurance company

A good way to find a trustworthy insurance company is to ask friends and family who own homes for referrals and recommendations, as they will offer unbiased reviews based on their experiences.

Different insurance companies offer different price policies

So how much do you pay for house insurance? There are many factors affecting the price of your policy, which can vary depending on the insurer. Different companies offer different discounts to clients, based on factors such as their loyalty to the company or how well-equipped their home is.

2. Financial stability of your home insurance company

There are different ways to check an insurer’s financial stability:

  • Ratings: Ratings companies specialize in rating insurance companies based on factors such as financial leverage and offer their services online for free.
  • Complaints: Official complaints regarding unpaid claims filed by customers are registered and publicly available online.
  • Business history: Standing the test of time in a competitive industry is usually a mark of a company’s financial strength.

A financially strong insurer will be able to pay out large numbers of customer claims even in sudden disastrous circumstances. When insurers do not have the financial resources to process high-volume requests, this can lead to clients paying out of pocket.

3. Using the same insurance company for different needs

A good tip for saving money on house insurance is to look for carriers who provide bundle offers and give discounted rates to customers who purchase both their house and car insurance from them.

4. State insurance companies

Governmental insurance in New Zealand

Given that early colonial New Zealand was characterized by a lack of roads whereas shipwrecks and fires were common, it is no surprise that the insurance industry in the country grew rapidly. While the government originally set up firms to compete with private insurers, these have largely been privatized.

While public and private insurance both have their pros and cons, private insurance typically offers shorter processing times and a wider scope of coverage when it comes to home and contents insurance in New Zealand.

Currently, there is only one governmental insurance company in New Zealand. It is called State Insurance and it has been helping New Zealanders with their insurance for more than 100 years already.

Insurance sales agent

5. Insurance agent choice

What to consider when choosing an insurance agent

In order to choose the right insurance agent, you should consider the following things:

  • Are they a direct agent working on behalf of one company or an independent agent?
  • Do they have the technical knowledge and good credentials?
  • Are they enthusiastic and friendly?

The trustworthiness of clients’ testimonials about agents

While client testimonials are a great resource for helping you find an agent, they are not always trustworthy. It is not uncommon for businesses to pay freelancers to leave positive reviews on their websites, but you should be able to identify fraudulent testimonials by keeping your wits about you online.

Saving money by choosing a professional insurance agent

A professional agent will not only offer you personalized attention and regular check-ins, but they will also explain how to estimate house insurance and help you save money by comparing all available insurance quotes and pointing out their benefits and drawbacks for you.

Thoughtful businessman with a laptop

6. Asking for your insurance agent’s advice

Your ideal insurance agent will have your best interests at heart and, so, it is advisable to ask them how you can lower your insurance costs. To ensure you are getting the best deal, ask if you are getting all the discounts for which you qualify and do not hesitate to ask them to match or beat a lower rate if you find one.

7. Monitoring your agent’s work

Trusting your agent

Although you should aim to work with an honest agent, it is advisable to always be wary. It is not uncommon for problems to arise when it is time for insured homeowners to file a claim, finding out that they are not covered for a certain type of damage.

Checking your agent’s work

If you have reservations about your agent and need to put your mind at ease, you can monitor their work:

  • Check their references.
  • Ask them questions.
  • Ensure that they comply with the law.

Online resources

8. Online insurance

Online house insurance

If you are familiar with the structural details of your home, you can buy house insurance online. There are plenty of insurance companies that offer an online service.

Buying house insurance online vs. offline: Which is cheaper?

How much does house insurance cost online? The truth is that, even though online insurance rates can be competitive, it is not always cheaper to buy house insurance online. Working physically with an insurance expert who knows your home can help you ensure you are covered for all possible circumstances, meaning it can save you money in the long run.

Buying house insurance online in New Zealand

To buy house insurance online in New Zealand, check out the following websites:

9. Online portals

Insurance comparison websites in New Zealand

If you want to conduct an insurance comparison in New Zealand, have a look at these websites:

Likely damages

10. Considering insurance costs when buying a new home

The region where your house is situated can affect the insurance price because of risks such as the local crime rate and susceptibility to natural hazards. Typically, the higher the likelihood of these incidents in your region, the higher the insurance rates.

11. Disaster-prone areas

An area is defined as hazard-prone if the mortality risk there is higher than a certain threshold. This could be because of natural disasters, such as typhoons, wildfires, floods, and others.

Disasters covered by house insurance include earthquakes, floods, windstorms, rockslides, and lightning strikes.

Young woman collecting water from a damaged ceiling

12. Improving your home outside

Making your home more disaster-resistant

Making your home more disaster-resistant is a sure-fire way to save money on your insurance. There are many steps you can take to protect your house from extreme weather and natural hazards, from inexpensive solutions to more fundamental changes to the structure of your property.

Reinforcing the outer parts of your home

To ensure your house is disaster-proof, you should reinforce its outer parts. You can protect your windows with storm shutters. An impact-resistant roof goes a long way to protect your house from extreme natural phenomena. Heavy, metal doors are ideal for securing a home while bolting the house to its foundation by bracing walls with plywood helps stabilize walls.

Insurance discounts for owners of disaster-resistant homes

A disaster-resistant home means that it will incur minimal damages in the likelihood of a catastrophic event. This makes owners of these homes appealing clients for insurers, whom they reward with better rates.

13. Improving your home inside

Making your home safer by reinforcing its inner parts

To reduce the risk of fire and water damage to your home, you should reinforce its heating, plumbing, and electrical systems. You should always check appliances regularly and you can upgrade washing machine hoses and install water detection devices.

Insurance discounts for owners of well-equipped homes

If your home is well-equipped, it is unlikely to sustain major losses or damages, which is why insurers commonly offer discounts for owners of homes with safety equipment installed.

14. Securing your home

To make your home safer, you can install the following things:

  • a smoke detector
  • a burglar alarm
  • good locks
  • ample outdoor lighting
  • security cameras

Better insurance prices for homes with safety and security equipment

Security equipment increases home safety, so insurance companies favour homeowners who have them by offering them better insurance rates.

Home insurance discounts

15. Discounts system

Getting all the discounts you qualify for

Insurance companies offer many different discounts and it is always worth checking to see which ones you qualify for. Insurers can offer discounts based on factors such as customer loyalty, whether you have other policies with them, whether you belong to a certain demographic, and others.

Discounts for specific groups of people

So how much is house and contents insurance if you are retired? Is it cheaper? The answer is yes! Insurance companies offer discounts based on whether you belong to a certain demographic, association, or profession. These may differ from company to company. If you think that you might qualify for a discount, don’t hesitate to ask your insurer about it.

16. Long-term relations with your insurer

Generally, it has been found that people stick with their insurance provider despite market changes. Some insurers reward long-term clients by offering them discounts for their loyalty.

17. Recommending your insurance company to other people

Insurers also offer discounts to clients who invite their friends, which is called a “referral”. Referrals are a cost-effective way to grow an insurance company and, so, they are often rewarded with better prices.

18. Informing your insurer about claim absence

Clients who have not filed a claim in many years are considered by insurers to be low-maintenance customers. As such, they are commonly offered discounts.

19. Extending the insurance period

In many cases, it is advisable to extend the insurance period for two or more years instead of having your house insured for the regular 12 months. The point is that many insurance companies offer discounts for longer periods.

Say, having your home insured for two years in advance will cost you less than having it insured for one year and then buying new insurance for the second year. In the first case, you are likely to get a discount for second-year insurance. Also remember that insurance prices tend to rise from year to year, which is another reason why long-term insurance can save you some money.

Taking such a decision is only appropriate in case you are planning to stay in the same house for the whole insurance period. Should you decide to move to another home before your insurance expires, it may be difficult (if not impossible) to get your money back.


20. Maintaining a good credit history

How your credit history affects your insurance price

Are you wondering “how is house insurance calculated”? When calculating your insurance price, insurers take your credit score into account, among other things. Your financial history helps them determine whether you will be able to pay your premiums. The better your credit history, the better your chances for a reduced price.

How to improve your credit history

Improving your credit history is important and you can do it by:

  • paying your bills on time
  • paying off debt
  • using credit cards sparingly

21. Separating house costs from land costs

Are you wondering how to value your house for insurance purposes? While you should be careful to not under-insure your property, it is not necessary to insure your house for the same amount you paid for it. The price you paid for your home includes the land it is on, which cannot be affected by a disastrous event.

22. Reading the declarations page & exclusions page carefully

The declarations page is the section of your policy which details what it covers. This is usually the front page of the document.

The exclusions page of your policy is the part that mentions what your policy does not cover.

It is crucial to read the exclusions page of your policy before signing, in order to not face any surprises when it is time to file a claim. Being unaware of one’s policies means a person can end up paying for repairs and damages out of pocket.

23. Reviewing your belongings regularly

It is important to review your belongings regularly because:

  • Some items lose their value over time and are not worth insuring anymore.
  • You may have purchased new valuable items that you would like to include in your policy.
  • Some items may have been damaged under circumstances covered by your policy.

You should review your belongings once a year.

24. Business insurance

With more and more people working from home in the digital age, you may be wondering if you can extend your house and contents insurance in New Zealand to cover your business. In most cases, this is easily arrangeable.

Business equipment that is automatically covered by house insurance includes computers, printers, fax machines, and photocopiers. For more specialist items, such as expensive audio-visual equipment, you need to consult with your agent.

25. Setting reminders

Setting reminders about your insurance can help you stay on top of things. If you have not bought or paid for your insurance premiums on time, you could lose money in case of a disaster.

Find a good deal

The home insurance market in New Zealand is very competitive and there are many good deals available to homeowners. Before you choose your insurer, you should shop around and educate yourself about available discounts in order to make the wisest choice possible.

You can always trust a CGPM property manager to help you find a deserving rental property and guide you in the process of home insurance in New Zealand using their multi-year expertise. A CGPM property manager will be able to confidently solve any doubts you may have about the home value in New Zealand and answer questions like “What’s the value of my home in New Zealand?” and “What’s my house worth in New Zealand?”!

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