Q&A: Insurance Matters

28 Jan, 2026

Are you worried that your home could become uninsurable because it's near the sea? Or that your insurer might stop covering homes where you live?

Join Christopher Whitehead, a lecturer at AUT Law School who used to work in the insurance industry , and now it's one of the areas that he teaches and researches, for the answers to your questions about house insurance.

What is house insurance? Is it the same as content insurance, and what is contents insurance?

So, house and contents insurance covers you if your property is damaged, destroyed or lost, typically by fire, vandalism, theft, or natural disaster. It may even cover you if someone else's property is damaged, destroyed, or lost, and it's your fault. It's common to buy house and contents insurance together, but you can buy them separately. And house insurance is often called home insurance, but there's no real difference.

What are the main house insurers in NZ?

So there are three, IAG and Suncorp which are Australian. And Tower which is local. IAG offers house insurance under the AMI, NZI and State brands and Suncorp offers it under the AA Insurance and Vero brands. There are other house insurers, but fewer Kiwis are insured with them.

Do I need house insurance? Won’t the government bail me out?

So, no, the law doesn't require the Government to bail you out. And the main problem with not having house insurance is that if your house is damaged or destroyed and you'd like to repair it or rebuild it, you may well have to pay. Also, no, generally, the law doesn't require you to have house insurance.

However, there are some exceptions. For example, the law does require a body corporate to have a special type of insurance for the units in it. This is better known as body corporate insurance.

My lender says that I need house insurance to get a home loan. Do I?

If your lender says you need house insurance, then yes, you do.

I’d like to get house insurance, but I don’t understand all the insurance T&Cs and fine print. What should I do?

If you're worried, go through a broker. If you'd like to find a broker and don't know where to start, try the links below. Even the Insurance and Financial Services Ombudsman, which helps resolve insurance disputes, says that you should read the insurance policy and make sure that it's right for you. However, in my opinion, it's difficult to expect you as a customer to be able to make sure that the policy is right for you.

In my opinion, the insurance industry should offer policies with standardised wording. Doing this would help us, as consumers of insurance, get a better sense of what's usually covered and usually excluded.

How much house insurance cover do I have to have? Isn't it hard to cover the cost of a rebuild with your insurance payout?

So, basically, you should have as much cover as you can afford. And there are three levels of cover. One, up to an amount chosen by you and agreed to by the insurer. Two, up to the amount your house was worth before it was damaged or destroyed. And three, up to the amount needed to rebuild. But this level of cover will cost a lot.

Does my contents insurance cover me if my property is stolen from me other than at home?

If the wording of your policy says so, then yes. It's important to know, though, that there's no official standard policy.

Why won’t my insurer take me on as a customer anymore? Why won’t another insurer take me on?

And why won't another insurer take me on as a customer in the first place? Generally, it's because the insurer thinks that there's too much of a risk of having to pay out to you, or that there will be too much to pay out to you if it has to pay out here. It may be that your house is in a high risk location, for example, by the sea. It may also be because the insurer has discovered a so-called misrepresentation or non-disclosure.

Misrepresentation is when you either honestly or dishonestly tell the insurer or something that isn't true. It's important for the insurer to know the truth. Non-Disclosure is similar, but different. It's when you either honestly or dishonestly fail to tell the insurer something that's known to you, unknown to the insurer, and important for the insurer to know. People tend to ask, if the insurer wanted to know why didn't the insurer ask? The problem is that the law simply doesn't require the insurer to ask. It's up to you to tell the insurer whether you're asked to or not. However, just to let you know some good news, it's likely that soon the insurer basically will have to ask you questions if the insurer believes that the misrepresentation or non-disclosure, was a dishonest one. The insurer is likely to blacklist you unfortunately. It'll blacklist you in the insurance claims register.

If you're blacklisted, it could be difficult or impossible for you to ever get insurance again. So for this reason alone, be honest.

Can an insurer just decide for itself who it will or won’t cover and where?

Yes. Generally, the insurer can just decide for itself. There are laws governing the New Zealand insurance industry, but they don't say very much on the questions of who the insurer will or won't cover and where. So one of the only things that the insurer definitely can't do is discriminate unlawfully. For example, it can't refuse to take you on as a customer based on your ethnicity.

I've always wanted to live by the sea, but I ‘m worried that I won't be able to get insurance there. Am I right to worry?

Yes you are. The insurance industry is becoming increasingly worried about houses by the sea. And the law doesn't require the insurer to cover your house if it doesn't want to.

Another question related to claims being refused -

It feels like my insurer does everything that it can NOT to pay out when I make a claim. Is it true?

It's not always true. In fact, it's common for the insurer to simply check that you're covered and pay out if you are. No insurer wants to get a reputation as an insurer that doesn't pay out. And sometimes it's simply more time and cost effective for the insurer to pay out than for it not to.

My house flooded twice in last year’s storms. Now, my premiums are going through the roof. What can I do?

There were really only two things that you can do. One, try to negotiate the premium down, two, try to find another insurer that will charge less.

What happens if the driveway, which is a common area, is damaged by flood?

Okay, here it really does depend unfortunately. Every cross-lease is based on a cross-lease agreement. And usually the agreement will say what happens in cases like this one. If you took your neighbours to court, it would probably order your neighbours to share the repair costs equally with you. However, if there are one or more units that depend on the driveway more, the court would probably order the owners of those units to pay more of the costs. However, none of this is certain. And unfortunately, it probably wouldn't be a pleasant experience.

What if I get into a dispute with my insurer?

So obviously it's going to depend, but you'll probably have at least three options. One. Ask your insurer, because the insurer will have what is called a dispute resolution process. Two, contact a lawyer if you're really worried. Three, contact the Insurance and Financial Services ombudsman. Now, although the ombudsman might not be able to help you with your specific dispute, it might be able to suggest other options.

What is the insurance industry doing to respond to climate change?

The insurance industry has started offering a new type of product called parametric insurance. Parametric insurance pays out a lump sum if you live within a certain distance of the disaster. The industry also uses several arrangements known as risk transfer. These include getting insurance with other insurers. This is known as reinsurance. Also, there are several ways that the insurer can get money from investors. These include what are known as catastrophe bonds or cat bonds. It's quite a technical area, so if you'd like to find out more, I've written about it on The Conversation.

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