What our house and contents insurance survey found

Of those respondents without contents insurance, 18% didn’t renew or cancelled their policy because of the high cost; while 8% of homeowners made the same choice for their house insurance. This continues a pattern we started to see last year.

Meanwhile, our insurance premium price survey found Wellington has been hardest hit by premium price increases for a standard-sized house this year, followed by Auckland.

For a large house, premium prices rose most in Auckland, closely followed by Hamilton.

What we did 

To get a snapshot of the market, we asked eight insurers to give us quotes for cover in five main centres: Auckland, Hamilton, Wellington, Christchurch and Dunedin. We requested quotes for:

• a couple with a standard-sized house insured for $550,000 and contents for $90,000

• a family with a large house insured for $800,000, and contents for $140,000.

We also asked consumers how satisfied they were with their insurance companies, in our latest satisfaction survey.

What we found

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 on 24%.

Dunedin also had increases for standard- and large-house premiums, up 12% and 9% respectively.

Wellington is still the most expensive region to insure a standard and large home. The median premium for a standard house is $3,733, while a large house comes in at $5,088.

It’s also harder to shop around for house insurance in Wellington and Christchurch. AA Insurance, AMI and State Insurance all won’t provide online quotes without a risk assessment of the property in these areas.

While Initio did offer online quotes for these cities, it also requires a risk assessment before finalising cover. FMG didn’t provide quotes for those centres because it’s a rural and provincial insurer.

The extra hassle of getting a risk assessment is likely to mean households won’t shop around for a better insurance deal, which risks limiting competition in some regions.

In our survey, Medical Assurance Society (MAS) is the only insurer offering full replacement. This means you are paid the reasonable cost of repairing or rebuilding your home to its pre-damaged standard; MAS calls it “area replacement”. MAS also has a sum-insured option.

The MAS quotes for full replacement were pricier than other insurers we surveyed, except for a large house in Dunedin. Yet the higher price reflects that you’re getting more coverage – and peace of mind.

Initio and Trade Me Insurance offered the cheapest insurance (for their sum-insured policies), depending on what region you live in.

In our premium price survey, insurers offered discounts for taking out combined house-and-contents policies, being claims-free for a set number of years, and for having an alarm. We accepted these discounts. Other discounts are noted in our table.

What’s behind the price increases?

In the past 10 years, according to Statistics NZ Consumer Price Index data, house insurance has increased 97% while contents has gone up 48%.

That upward trend doesn’t look like it’s going to stop anytime soon.

The cost of reinsurance, extreme weather events, and increased use of risk-based pricing on individual properties by insurers are all factors in the price rises.

Most insurers in Aotearoa are retailers, buying insurance off multinational underwriters and on-selling it to us. Given the more frequent extreme weather events Aotearoa is experiencing, and their related claims, the cost of buying insurance has gone up, and it’s being passed onto us.

Add in the mix the far more granular information that insurers now have access to – around the risks posed to particular properties and areas of Aotearoa – and the outcome is consumers being hit in the pocket.

So, is there anything that could bring prices down?

Insurer IAG (with brands AMI, State and NZI) says better planning by local councils, investing in protection and resilience measures, and retreating from at-risk places will help bring insurance prices down.

While central government released a climate adaptation plan in 2022, it’s local councils that are on the front line of protecting their communities from the impacts of climate change.

Work on this is underway, but it could take years, and deep pockets, to ensure New Zealanders are out of harm’s way – with prices likely to stay high in the meantime.

How to get cheaper house and contents insurance

One way to get a better deal is to shop around.

Yet, our insurance satisfaction survey showed that only 17% of our respondents are likely to change insurers in the next 12 months.

One barrier to finding a new insurer is the difficulty of comparing insurance products. To compare insurance products, check out our survey.

The Insurance Council of New Zealand also recommends installing an alarm at your property. Most insurers offer a discount for alarmed properties.

Also check whether there’s a discount for paying your premiums annually (rather than monthly, for example). However, given rising costs, this is unlikely to be a viable option for many consumers.

Opting for a larger excess can also make your premium cheaper. So, instead of paying the first $500 on a claim, you could increase it to between $750 and $2,500.

If you can’t afford full cover from an insurance company, you could ask if it offers a fire only, or fire and burglary policy. This would be cheaper than all-risk cover and would mean you were still entitled to EQCover in the event of a natural disaster.