Do I need house insurance and how much does it cost?

The insurance that you need depends on the assets you hold and your personal circumstances (i.e if you have any dependents), but most homeowners should have house insurance.

House insurance protects your home against fire, flood, weather, accidental damage and more. You’ll pay a monthly premium to an insurer who will cover the cost of damage (usually minus a certain amount, called an excess).

In most cases your insurer will cover the damage up to a predetermined amount known as sum insured. More on this later.

Note: If you’re a tenant you generally don’t need house insurance but you may need contents insurance.

Contents insurance is often sold together with house insurance. It covers damage or theft of the items within your house like your clothing, furniture and unfixed appliances (TVs, fridges etc).

Some insurance policies may also cover the costs if you damage someone else's property in your home. You may be surprised at how much it costs to replace the contents in your home and if your home is damaged, your contents may be too, so experts usually recommend having this cover.

While they’re not essential, life insurance, trauma insurances, and other insurances that cover your income if the unexpected happens are something to consider for most homeowners.

If you pass away or become sick and are unable to work, these insurances pay out to help you cover your mortgage payments and any other expenses. This can make it easier for you and your family to keep your home if you’re no longer with them or you’re unable to provide the same level of support.

You’ll automatically get EQC (Earthquake Commision) cover if you have a private house insurance policy that includes fire insurance. This will provide you with cover against loss or damage from earthquakes, tsunamis, landslides and volcanic eruptions – as well as some cover against storms and floods.

A single story, owner occupied home in Māngere with a sum insured of $700,000 had an average yearly premium of $2,094, according to quotes obtained from major insurers by MoneyHub in August 2023. The same home in Christchurch costs an average of $2,201 to insure and, in Wellington, $3,218. 

The cost of your house insurance will depend on several factors including the property’s age, location, use and your sum insured. Its susceptibility to damage from weather or natural disasters and your level of excess may also affect premiums. 

Usually your lender will require you to get house insurance before settling on any house purchase. It’s a good idea to start looking for appropriate insurance cover as soon as your offer or bid at auction is accepted, to give yourself plenty of time to shop around.

MoneyHub’s research shows that the cost of insuring the same home can vary greatly between providers so it’s always best to get multiple quotes to ensure you’re getting the best possible deal.

When you buy a house insurance policy usually you’ll be required to select a ‘sum insured’, or the maximum amount you’ll receive if your house is completely destroyed.

You cannot base this amount on what you paid for your house, its potential resale value today or what you built it for. The cost to rebuild your house will change every year due to inflation (which is particularly rampant in construction) so you’ll need an estimate that draws on current construction costs to calculate an estimate.

Luckily, you can calculate this in just a few minutes by popping your address into the Cordell Sum Sure Tool, making sure to check all the automatically inputted details are correct. Once you’ve done that the calculator will generate a rebuild cost including professional fees, demolition costs, and GST.

The first thing to do if there’s a fire or any other emergency, is to ensure that you and your family are safe, and to reduce damage to the property (if it’s completely safe to do so). Call 111 if it’s  an emergency. 

Once you and your family are safe, it’s a good idea to call your insurer right away – most will have a free-to-call 24 hour hotline for emergencies. They'll let you know what you need to do to progress your claim and, if your insurance allows, can arrange temporary accommodation for you if your home is unsafe to live in. 

You’ll likely need to provide them with full details of what occurred, information and photos showing the damage, as well as who was involved, including emergency services.