Do your homework on the new home insurance rules

Date: 21st July 2013


As a result of the Christchurch earthquakes, and in order to simplify the pay-out process, insurance companies are now switching from ‘total replacement’ cover to ‘sum insured’ home insurance cover.  If your house was to burn down, with ‘total replacement’ cover the insurance company will pay to have it demolished and replace your house, as opposed to paying out a specific sum (‘sum insured’).  It is therefore important when you renew your home insurance you carefully calculate your ‘sum insured’ so that it is adequate to cover all costs associated with rebuilding your home.


QV is not an accurate measure of the sum you should have your house insured for.   In addition to actual rebuild, you will need to consider many variables including:


  • Demolishing and debris removal
  • Planning and council consent fees
  • Architects fees
  • Landscaping, driveways, fencing, swimming pool, tennis court, shed and garage
  • Subsequent upgrades to your property
  • Inflation

Where to go from here?


1)   Invest some time in some background research such as listening to these informative podcasts from Simon Morton’s This Way Up programme on Radio NZ:


2)   Use an on-line calculator tool such as the Cordell calculator


3)   Consider using a valuer, builder or quantity surveyor for a more comprehensive and accurate valuation.


Other reading:


Posted in: Latest News