In addition to natural calamities, theft, and accidents that sometimes happen, home insurance could also cover your home against the most unforeseen event. As this is one of the biggest investments that anyone could ever make, it would be vital to get the right level of protection that will ensure peace of mind and financial protection. The following guide is intended to take a closer look at different kinds of home insurance available in New Zealand, what affects its premiums, how one may reduce the costs, and provide some tips on making the right choice.
Home insurance in New Zealand falls into two broad categories:
To select a home insurance policy, one needs to understand the difference between full replacement cover and sum insured cover.
A typical home insurance policy generally covers a wide range of events that could result in damage to your home. The kinds of coverage include but are not limited to, the ones listed below.
Natural Disasters
Most policies include protection against fire, storms, floods, and bushfires. Some of these extreme weather events, such as cyclones or hailstorms, may make it difficult for you to get a standard premium, especially if you live in an area prone to disasters.
Theft and Vandalism
If your house is broken into and things are stolen or otherwise destroyed, your home insurance policy will replace what has been taken and repair anything that has been broken.
Accidental Damag
Although not necessarily included under the most basic house insurance policies, many comprehensive options do include accidental damage, such as a broken window or an appliance malfunctioning to cause water damage.
With Aussie home insurance, you're really well covered, but there are a few things it doesn't cover. That includes normal wear and tear, infestation of pests, and deliberate damage. If your roof starts to leak or your pipes burst because they are old, then in most cases, you are not covered. You have to keep your place in good nick. Termites and other critters causing damage? That's usually not covered, either, because such problems can often be avoided by performing regular maintenance. And if you or your tenants intentionally damage your home, well, don't look to insurance to cover that, either.
Several factors come into play to determine the cost of your Aussie home insurance premium. High-risk homes, obviously those in flood zones, bushfire zones, or near the coast-cost more for premiums due to their dangerous vulnerability from natural disasters. Older homes may fall into a slightly higher price category due to aging infrastructure or outdated safety features. Having security systems installed, as well as smoke alarms and fire extinguishers, will help keep your premiums at a minimum. Then, your rates may be higher if you've filed many claims in the past.
While you want comprehensive coverage, there are a number of ways you can decrease your house insurance premiums:
Increase Your Excess
You can opt to pay a higher amount when a claim is made this will lower the amount of money you have to pay every month. Just make sure you can afford this amount if you should have to file a claim.
Bundle Policies
Most insurance providers give a discount for bundling various kinds of insurance, such as home, car, and contents, with the same provider.
Install Safety Features
You can install deadlocks, burglar alarms, or even upgrade to fire-resistant roofing materials. This reduces the risk and, consequently, lowers premiums.
Correctly estimating your home's sum insured is a way of avoiding underinsurance; it includes all rebuilding costs, including materials, labour, and demolition. If your house has some form of specialty architectural feature or high-end finishes, make sure to include those in your estimate, too. Also, add in the council fees and approvals because when one is rebuilding, these are sure to add up. Online calculators and professional advice will provide as close to an accurate rating as possible to determine just what your property requires.
Home insurance provides the most basic security to your house and its properties from perils due to natural calamities, theft, and possible accidental damage. Understanding the types of cover, such as building insurance, contents insurance, full replacement cover and sum insured cover, would help you in selecting the right policy.