Consumer NZ Shows Kiwis’ Insurance Concerns

Default Profile ImageBen O'Connell
Kiwis’ Insurance Concerns

In the most recent insurance satisfaction survey conducted by Consumer NZ, almost two-thirds of participants expressed worry about the expense of homeowner’s insurance, with 8% of homeowners letting their coverage expire because of excessive premiums.

“This continues a pattern we started to see last year. We urge New Zealanders to review their current level of cover, and shop around,” says investigative team leader at Consumer NZ, Rebecca Styles.

“It’s likely you’ll find a better deal and can maintain some level of protection – which is better than no cover at all.”

Overview of the Consumer NZ Insurance Survey Findings

House insurance has increased 97% in the past decade. Contents insurance has gone up 48%.

“Wellington has been the hardest hit with premium price increases for a standard house – up 29% from this time last year. It was followed by Auckland up 26%.

“For a large house, premium prices rose most in Auckland – up 28% – followed by Hamilton at 24%. Dunedin also had increases for standard- and large-house premiums, up 12% and 9%, respectively.”

Styles says that extreme weather events, the cost of reinsurance, and increased use of risk-based pricing on different properties are all factors in the price increases.

“Insurers also now have access to granular and more accurate information around the risks posed to particular areas and properties in New Zealand.

“Given the more frequent and extreme weather events Aotearoa is experiencing, and their related claims, the cost of insuring properties has gone up, and these costs are being passed onto consumers.”

“The best thing people can do is to review their current level of cover, shop around and get ready to switch when you find a cheaper policy – they are out there.”

Practical Advice for Kiwis on Insurance Matters

Consumer’s insurance satisfaction survey found that just one in five respondents were likely to change insurers in the next year.

“Our surveying shows time and time again that it’s difficult to compare insurance providers to find the best deal. Now, to make things trickier – many insurers won’t provide online quotes without a risk assessment of the property.”

Opt for a larger excess

“Instead of paying $500 on a claim, you could increase it to between $750 and $2,500 and this can drop your premium.”

Styles shares this advice with a caveat, though.

“If you decide to increase the excess, make sure you can afford it. Should disaster strike – you don’t want to risk paying for insurance you can’t even access.”

Reassess your needs

Styles says you can consider a fire-only or fire-and-burglary policy if you’ve received quotes for insurance that you still cannot afford.

“While you may not be covered for everything, it will be cheaper than comprehensive or ‘all-risk’ cover, and crucially, mean you’re still entitled to EQCover in the event of a natural disaster.”

Get that discount

Consumer’s premium price survey showed that some insurers offered discounts for having an alarm, for taking out combined house and contents policies, and for being claims-free for a set number of years.

“Given rising costs, paying for your premium for the year ahead (rather than monthly, for example) may afford you an annual discount. Given rising costs, this is unlikely to be a viable option for many consumers.

“If that’s you – know you’re not alone.”