House Insurance
Domestic house policies are covered on a ‘sum insured’ basis (excluding land), which is the maximum amount insurers will pay to rebuild a home in the event it is damaged or destroyed beyond repair.
The sum insured needs to allow for associated costs too, such as demolition and debris removal costs, consents and fees related to repairing/rebuilding, labour, and materials. As such, the insurance sum insured is not going to be the same as the ‘market value’ of your home.
Depending on your chosen policy, other items may also need to be noted for specific coverage amounts, such as retaining walls, swimming pools, tennis courts, and bridges.
As a homeowner, you need to ensure the sum insured will cover the amount it will cost to completely rebuild your home in the event of a total loss. If your sum insured is inadequate, you may need to rebuild your home to a smaller size or lower quality, or even pay some of the rebuild costs yourself.
Because of inflation and the ongoing effects of global supply chain issues, the costs of materials and labour in New Zealand are rising, which means your sum insured may be inadequate in the current market.
Engaging a registered valuer to undertake a comprehensive valuation of your property is the most accurate way to establish a sum insured. This should be done every few years.
For those in between years, we encourage you to use the Cordell Calculator, which is a free, independent, user-friendly online tool you can use to estimate the rebuild costs for your property. This tool is also used by insurers and while it’s not as accurate as a professional valuation, it will give you an idea of what you should consider insuring your home for*. Please note, the Cordell Sum Sure estimates are GST exclusive.
*As the insured, you are ultimately responsible for setting the sum insured for your insurance policies. Abbott Insurance Brokers may provide general guidance around sums insureds, but we are not responsible should you decide to set your sums insured at values that do not meet your requirements in the event of a claim. We also take no responsibility for the accuracy of tools provided to assist you in calculating sums insured. As per their terms of use, these independent tools provide estimates and you must decide whether you believe these to be appropriate. If you are unsure, you should obtain professional valuations at your own cost.
Contents Insurance
Many Kiwis underestimate the value of the personal items they own, so it’s important to remember your contents sum insured is the total amount your insurer will pay in the event of a total loss. As such, you should ensure your contents sum insured covers all of our possessions.
Contents policies usually have limited cover for items such as higher-value jewellery and watches, hearing aids, artwork, and certain sporting equipment, such as bikes. These may need to be specified on your policy if their values are over a certain amount, so please advise your broker if you own any such items.
There are several ways insurers will pay out to settle a contents claim based on the insured value of an item, such as ‘market value’, ‘replacement value’, ‘like-for-like’, and ‘new-for-old’. Different insurers have different types of contents policies available. We strongly recommend you read your policy documentation to ensure your understand how you will be paid in the event of a loss, and do not hesitate to contact your broker for clarification.
To help you work out your contents sum insured, this calculator is a great starting point. It works on a similar basis to the Cordell calculator and inputs some suggestions for you automatically, but you are able to adjust details and include any items that would need to be specified*.
*As the insured, you are ultimately responsible for setting the sum insured for your insurance policies. Abbott Insurance Brokers may provide general guidance around sums insureds, but we are not responsible should you decide to set your sums insured at values that do not meet your requirements in the event of a claim. We also take no responsibility for the accuracy of tools provided to assist you in calculating sums insured. As per their terms of use, these independent tools provide estimates and you must decide whether you believe these to be appropriate. If you are unsure, you should obtain professional valuations at your own cost.
