The median price for insurance for a large house in Auckland had dropped 11 percent year-on-year, Consumer NZ said.
Photo: RNZ
Aucklanders may finally be getting some relief on their insurance premiums – but the same cannot be said for Wellington and Christchurch, and some people are struggling to get it at all.
Consumer NZ said its latest survey of house and contents insurance premiums showed the median price for insurance for a large house in Auckland had dropped 11 percent year-on-year.
But in Wellington and Christchurch, the cost of insurance was up 10 percent.
Wellington was the most expensive city in the country for house insurance. The median cost of house and contents cover for a standard home was $3824 a year, Consumer’s insurance expert Rebecca Styles said.
Dunedin has the cheapest home insurance options, with the median cost for house and contents insurance for a standard home coming in at $2227.
The quotes were based on a couple with a standard-sized house insured for $560,000 and contents for $90,000, and a family of four with a large house insured for $840,000 and contents for $140,000.
Styles said people could often save money by shopping around.
“When we compared policies with the same excess and sum insured across the six centres, we found the median potential saving was about $550.
“More than eight in 10 people have had the same insurance provider for at least three years. When people decide to switch, it’s usually because of price, and with some of the savings available, we can see why.”
She said people who could find a better price elsewhere could use that to try to negotiate a discount with their current provider.
Opting for a higher excess could also mean lower premiums. But Styles said people should not set their excess so high they could not cover it if they had to claim.
“Ask your insurer if your premiums would be cheaper if you installed an alarm or security cameras – the savings might subsidise the installation costs. If you can afford to, pay your premiums annually – you should get a discount.”
Styles said 1 percent of the 3000 people who responded to the survey said they could not switch because no other provider would offer insurance.
The Auckland drop was coming on the back of a large spike after Cyclone Gabrielle and the Auckland Anniversary weekend flooding, she said. It could be that flood mitigation efforts and infrastructure improvements were also reducing risk.
But people in high risk areas were likely to find it harder to find insurance, she said.
“I think in Wellington and Christchurch, it’s the same old thing of earthquakes, floods and landslides. And it just means that we’re paying more and more for insurance in those regions.
“With the reports of AA Insurance not covering some postcodes, and I think other insurers are weighing up risk across the country, they’re always monitoring their risk portfolios and making sure they don’t have too much risk in one area more so than another. And, if we don’t do anything about a climate adaptation framework, practically in terms of infrastructure – there’s just more and more frequent extreme weather events and flooding – if the infrastructure doesn’t keep up with that, I think prices will just keep going up and up.”
If someone was struggling to find suitable cover, they could contact the Natural Hazards Commission and ask about its natural hazards cover, which offered more limited protection, she said. “It’s sort of the insurance of last resort for natural hazards. So it would be for your house, it wouldn’t be for your contents.”
She said the government’s investigation into the insurance market would help in terms of giving people assurance about whether they were paying fair price.
“We eagerly await the outcome of that, given it’ll be at least six months.”
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