Why Has My House Insurance Premium Increased?

03 Jul Why Has My House Insurance Premium Increased?

If you’ve noticed a sudden rise in your house insurance premiums, you’re not alone. Many homeowners across New Zealand are experiencing similar increases in their house insurance costs. As NZ insurance costs continue to escalate, there’s growing concern that some homeowners may struggle to afford their insurance policies. However, for homeowners with mortgages, renewing insurance is not only a crucial way to protect their assets but also a mandatory requirement of the mortgage. If a mortgage holder doesn’t renew or cancels the policy, all interested parties (including the lender) will be notified, and the lender will usually take action to secure insurance coverage. Find out what factors are causing house insurance premiums to rise and get some strategies to help save on your house insurance costs.

What’s causing house insurance premiums to rise?

House insurance premiums have increased significantly across various regions of New Zealand. Factors such as natural disasters, extreme weather events, inflationary pressures, rising construction costs, and higher claim rates have resulted in some insurance providers adjusting insurance premiums to cover the rising cost of settling claims and managing risk effectively.

• Natural disasters and extreme weather events, like floods, have become more frequent and severe, and insurers face higher pay-outs for home damages.
• Inflationary pressures have compounded the issue, driving up overall expenses, including the cost of materials and labour required for repairs or rebuilding, and increasing the cost of settling claims.
• Areas experiencing a spike in insurance claims are likely to see an increase in premiums for all homeowners in that region, as higher claim rates often indicate greater risk.
• Individual factors such as a homeowner’s claims history and the condition of their property also play a role in determining insurance premiums.

How to save money on house insurance premiums

When it comes to saving money on house insurance premiums, homeowners can consider several strategies. Comparing insurance quotes from multiple providers, bundling policies, opting for a higher excess, reviewing the sum insured regularly, avoiding making small claims, and getting advice from an Insurance Adviser are effective ways to reduce insurance costs.

• Shop around and compare quotes from multiple insurance providers to find the best insurance cover at the most competitive price.
• Consider bundling your house insurance with other insurance policies, such as car or contents insurance, to qualify for multi-policy discounts.
• Opt for a higher excess to lower your premiums but check you can afford the increased out-of-pocket expenses should you need to make a claim.
• Regularly review your sum insured – the maximum amount that your insurance provider will pay to rebuild your home in the event of a claim – to ensure it accurately reflects the current value of your property. Not having enough insurance cover could leave you financially vulnerable should you need to claim.
• Only claim for significant losses and avoid making small claims, as frequent claims can lead to higher premiums over time.
• Get advice from an Insurance Adviser and get help navigating the complexities of insurance policies and finding tailored economical solutions that fit your needs.

Reassess insurance coverage and explore your options

Climate change poses significant challenges for the future of house insurance. With the increasing frequency and severity of extreme weather events such as storms and floods, and rising sea levels posing a threat to coastal properties, insurers are faced with higher risks and increased pay-outs for damages to homes. These additional costs inevitably get passed on to customers.

As the impact of climate change evolves, it’s become increasingly important for New Zealand homeowners to regularly review house insurance coverage and check they have the right level of cover to safeguard their properties. Proactively planning and regularly reviewing insurance cover ensures your house insurance remains fit for purpose, so you’re not left underinsured should something go wrong or ending up paying too much for cover you don’t need.

Get help from an expert: Contact Max Insurances today to connect with an Insurance Adviser who can assess your insurance needs and review your existing policies to determine you have the right insurance cover. They can also help if you need to make a claim, by following up with the insurance provider and liaising on your behalf.

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