Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


One year on, about two thirds of homes may be under insured

One year on, about two thirds of NZ homes may be under insured, say insurers

By Suze Metherell

March 31 (BusinessDesk) – About two thirds of New Zealand homeowners haven’t bothered to change their insurance policies after insurers changed to ‘sum insured’ policies last year, suggesting many don’t have the cover to completely rebuild their properties.

The Insurance Council of New Zealand said informal industry reports suggest 60 percent to 70 percent of kiwi customers have opted to accept default cover, which is based on the average per-metre cost to rebuild a ‘standard house’.

The new policies don’t distinguish between a renovated villa, an ex-state house or one designed by an architect. They also don’t take into account building materials or add-ons such as decks, and as a result many policyholders don’t have enough cover to completely rebuild their existing home.

The change was forced on insurance companies by reinsurers who faced multi-billion dollar costs after a spate of global disasters ranging from the Christchurch earthquakes to the Japanese tsunamis and floods in Queensland and Southeast Asia. Sum insured puts a cap on rebuilding costs, giving reinsurers more certainty they can cover losses.

“We’re of course concerned about New Zealanders being under insured but it’s also about customers understanding their individual circumstances and insuring to meet their personal future needs,” said Samson Samasoni, an Insurance Council spokesman.

AA Insurance, a joint venture between the New Zealand Automobile Association and Vero New Zealand, said 75 percent of its homeowner customers hadn’t responded to the sum insured changes introduced last year.

“The default figure may not be enough to rebuild or repair your home to the same standard it is now,” said Suzanne Wolton, head of customer relations at AA Insurance. “It’s possible that the vast majority haven’t calculated a figure, or contacted a building expert to calculate a figure, but have simply put it into the too-hard-basket and consider the default figure to be ‘good enough’.”

Customers who would want to return their home to its current status need to provide their insurers with a rebuild amount, and pay the increased premium to match. AA Insurance said every $100,000 of extra cover would add, on average, about $40 to annual premiums.

Increased insurance premiums reflected the cost of reinsurance, the Insurance Council says. In a typical house policy with a premium of $1,000, about 40 percent would be the insurance company, 24 percent reinsurance, with the remaining 36 percent made up of EQC and government levies and tax.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news