But how does this affect me at my place?

Well, you need to decide how much to insure your home for

Understanding home insurance

It's important that you understand what your home's Sum Insured covers and what it does not, and what you may need to do when your home policy renews or if you take out a new home insurance policy that's underwritten by IAG.

Why it's important you check your Sum Insured

It's important your home's Sum Insured amount reflects the potential cost of rebuilding your home as accurately as possible, because if your house is ever destroyed, your insurer will pay no more than the Sum Insured amount, even if the actual cost of rebuilding your home turns out to be greater.

So, if you set the Sum Insured amount too low and you need to repair or rebuild your house, you may have to rebuild to a lesser size or quality, or pay for some of the repairs or rebuilding yourself.

And if you set the Sum Insured amount too high, you may be paying too much for your home insurance, because if the cost of rebuilding your home turns out to be less than the Sum Insured, the policy does not require IAG to pay more than the actual cost of rebuilding.

Why it's important to check the rest of your policy schedule

Your policy schedule, sent to you every year as part of your policy's renewal, contains the information that your insurer has about your home.

You should always check that this information is correct and up-to-date. For example, if your home includes extensive Retaining walls, you should check if these are noted on your Policy Schedule.

Equally, if you have made improvements to your home since you took out or renewed your policy, you should inform your insurer and decide whether you should increase your home's Sum Insured to reflect the improvements.

From time to time, your insurer may make adjustments to the excesses payable at claim time, or introduce new excesses. It also pays to check the information that comes with your policy renewal for more information about these.

Retaining walls and Recreational Features

Retaining walls and Recreational Features - i.e. permanently fixed swimming pools and permanently fixed spa pools and tennis courts - have limited cover in most IAG-underwritten policies. In your policy this is called a policy limit or cover limit. If the likely cost of rebuilding these is more than the cover provided automatically by your policy, you may wish to specify these on your policy and purchase additional cover. Your home's Sum Insured will then increase accordingly. This will likely affect the premium payable for your home cover.

Some IAG-underwritten home policies no longer provide any level of cover for these features. In this case you'll need to decide if you'd like to purchase cover so that your Recreational Features and/or retaining walls are protected.

Special Features of your home

Special Features are not automatically covered under any IAG-underwritten home policies. These are jetties, wharves, private landings, permanent fords or dams, bridges and culverts, cable cars and private utility plants such as wind or water mills or diesel generators. If you require cover for any of these features you'll need to talk to your insurance provider and this will likely affect the premium payable for your home cover.

Fixed floor coverings

Fixed floor coverings such as fitted carpets are now included in home policies underwritten by IAG, so it's a good idea to include an amount for them in your Sum Insured. The calculator on this site does not build in an allowance for the costs of replacing fixed floor coverings, so you will need to add this in to the figure produced by the calculator.

What about premiums

As well as reflecting your home's Sum Insured amount and the increasing cost of home claims, the premium you pay for your home insurance reflects the cost of reinsurance that insurers are required by legislation to hold as well as administrative costs. Your premium also includes Earthquake Commission and Fire Service levies and GST.

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