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House insurance - the new way

House insurance - the new way

Old Oct 20th 2013, 11:08 pm
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Default House insurance - the new way

Well it's time to seriously get my head around the change in how we insure our property. All of the onus is on us now to get it right & at the same time be aware of the difference in premiums. This is a really important issue for all the property owners out there.

Has anyone worked out,submitted,compared premiums yet?
Would you be good enough to share your experience so the likes of me,who've been hiding under a ponga bush, will realise it's not so daunting.

Please?
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Old Oct 20th 2013, 11:52 pm
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Default Re: House insurance - the new way

I've just bought a house so had to do this for my insurance.
When I was calling round for quotes I was advised by most companies to use this...
http://homebuilding.cordell.co.nz/in...e=38&restart=1
to get a rebuild cost and then to add at least 15% extra for cost of site clearing etc.
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Old Oct 21st 2013, 8:48 pm
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Default Re: House insurance - the new way

Thank you very much for this. Extremely helpful.
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Old Nov 2nd 2013, 2:15 am
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Default Re: House insurance - the new way

I've just spent time this afternoon doing this exercise.

We are with AMI.

They advised I use a website called nned2know.co.nz to work out the 'Total Sum Insured'

I found some of the questions a bit hit and miss. We are part on piles and part on a concrete base. There was no allowance for that type of thing.

I did the compare quotes between insurers last year & realised there wasn't any difference really . We have all our insurance with AMI.

It seems that the AMI rebuild figure is a good 20% under the figure that need2know came up with after I had input all required info.

If I then add the 15% extra that was suggested to lisamct it puts the suggested figure of rebuild costs under by a huge 35%.

This means their premium is going to be way out As the build insurance has already doubled over the past 2 years , I think the new premium is going to be scary.

It's so awkward really. Must not under insure but it is possible to over insure and still lose out.
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Old Nov 2nd 2013, 2:25 am
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Default Re: House insurance - the new way

to add. Just did the Cordell calculator. This had slightly different questions but the rebuild cost answer was the same.
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Old Nov 2nd 2013, 3:06 am
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Default Re: House insurance - the new way

Just used the calculator, our rebuild cost would be $448K, we bought the house for $250K......
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Old Nov 2nd 2013, 6:15 am
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Default Re: House insurance - the new way

Based on the information you have provided, the amount required to rebuild your home is $705,059
Plus 15% ?

Wow, methinks we would need second mortgage to pay the insurance.
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Old Nov 2nd 2013, 9:08 am
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Default Re: House insurance - the new way

I've come up with similar numbers on our rebuild price, bought for $390k, rebuild $490k. We bought the house in Jan 2013, the last owner was paying IAG about $40 a month. With the same insurer we currently pay over $70 a month. Can't wait until renewal so see what price they cook up.
Ho ho ho Merry Christmas.
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Old Nov 2nd 2013, 12:56 pm
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Default Re: House insurance - the new way

This made me smile I used to work in insurance in the UK, and the number of people we had call at renewal time because they didn't understand the difference between rebuild and market value was astounding some days. Seemed like every third call was,

'I've just got my renewal through and you've got my house insured for $250k, but I paid $475k!' They all wanted it raised, even though we'd never have paid that out in a claim.

It's the other way around in Canada too, our house is worth under $200k, but it's insured for about $800k I think. Also, they don't let you choose how much contents cover you have, they do it as a percentage of the rebuild cost, which is more than ridiculous I think, as ours is set higher than the value of the house. We'll likely never own that much stuff, and they'll likely never pay it out because of having to submit receipts etc. Just another way to make extra money methinks.
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Old Nov 3rd 2013, 8:53 pm
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Default Re: House insurance - the new way

Originally Posted by Dashie View Post
I used to work in insurance in the UK, and the number of people we had call at renewal time because they didn't understand the difference between rebuild and market value was astounding some days.


It's the NZ quakes that have brought about the changes to rebuild costs here.
Property insurance nearly doubled after the quakes .

This year the way a house is insured changed. It has gone from replacement cover based on the floor area of the property to a total sum insured cost which is a calculated specified amount which the home owner must decide upon.

Out of interest. Our rebuild cost works out to about 90% of the current market value of the house + land and two and a half times more than the rated value of the dwelling.
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Old Nov 4th 2013, 12:03 pm
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Default Re: House insurance - the new way

That's to be expected though. That must have been a huge bill, and they need to save up for the next one too. Sucks, but not much that can be done.

To be honest, I think that setting your own sum insured is much better, and fairer. With everyone paying an average cost (as is the system here too), you basically have people covering a portion of their neighbour's granite worktops, when you have cheapy composite, or posh wool carpets etc. They would average the cost of that over everyone. So now you can set your own level, you only have to insure what you really need. Does that make sense?

It's how it usually is in the UK to my knowledge (which is a little out of date, but I don't think that much has changed). Some insurers set minimums for number of bedrooms etc. but the total has always been at the discretion of the homeowner because only they know the exact fixtures and fittings in their own home.

Lol! I've noticed on Trademe that the rated value seems to mean absolutely nothing!
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Old Nov 4th 2013, 7:57 pm
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Default Re: House insurance - the new way

I feel that many will under-insure or go with the insurers quoted premium, simply because they will feel they can't afford another huge hike in premiums.
They have already nearly doubled in the past 2 years.

A kind of russian roulette, as happens with car insurance which is not compulsory here so many don't bother.

Many older folk won't be able to afford the hike either.

...and those in the quake zone of Christchurch have already experienced the nightmare that is EQC and insurers.
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Old Nov 5th 2013, 5:33 am
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Default Re: House insurance - the new way

Originally Posted by BEVS View Post
...and those in the quake zone of Christchurch have already experienced the nightmare that is EQC and insurers.
And many are still experiencing it. Its not over by a long chalk. Even for those of us not in Christchurch any more.

The other issue to come out of this is the realisation of how much (or how little) your insurance policy is worth when the chips really are down. Whatever company you are with please, please read your policy, know exactly what is covered and what is not, and perhaps do some research on how your chosen company has performed and acted during this time as their customer service to Christchurch and Canterbury people (and perhaps to those in Marlborough also) is likely how they will treat you should you have the misfortune to experience an event like it.
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Old Nov 5th 2013, 10:47 pm
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Default Re: House insurance - the new way

Can't really add on what's already been said, except this;

Insurance very much catch 22. If you under insure and need to claim, you could find you fall short in the event of disaster and in the long run it costs you more.

Difficult if you simply can't afford to pay any more.

The irony being with insurance that it's something we pay for that we hope we never need to use!! It's a difficult thought to digest.

I'm pleased to say we're part of a very forward thinking and transparent Body Corp who deal efficiently with building insurance on our behalf. Some other Body Corps aren't quite so good.
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Old Nov 6th 2013, 12:04 am
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Default Re: House insurance - the new way

I have been into the insurers today to have the discussion about the changes and our total sum insured.

Apparently the costs for demolition & removal is already built into the calculators .

What isn't factored in would be possible hike in costs/charges if several/many properties in an area were to be damaged. As in Christchurch.

With that, I have settled on a sum which is $40K more than the calculator suggested. This may be an over insurance but if prices hiked it would help ease the strain.

Our annual premium has now increased on last year by $120.

I was advised to review the sum 6 monthly .
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