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You may have read or seen in the media about changes in the way houses are Insured.
When House Insurance policies come due for renewal, owners will need to take definite steps to insure their houses accurately.


Since the 1970’s Houses have been insured for Replacement Cost based on their size. The policy covered “Replacement of your house to the same size, using similar materials or the equivalent available.”

There was not an upper limit in cost and the premium was based on the size of the house and outbuildings.


 The Replacement Cost of houses will be based on a dollar figure provided by the owner, as described below.

This amount will be the upper limit payable to replace the house in the event of a total loss by fire or other disaster.



There are a few ways that the Replacement Cost of a house can be established:

  • By completing the online calculator provided by insurance companies, (see www.need2know.org.nz/nzi for the NZI calculator which we consider as the best one on offer)
  • By arranging for a Registered Valuer to carry out a valuation,
  • Providing the Replacement Cost another way, for example from a builder or other qualified person.




We are predicting that, apart from when or if a house is extended, this will be a “once only” exercise. Insurance companies are highly likely to increase sums insured to keep pace with building costs and inflation.



  • Insurance companies and brokers are not qualified valuers, builders or quantity surveyors, so the amount that houses are to be insured for must be decided and set by the owner. It will be made clear that the owner is responsible for setting the Sum Insured.
  • Insurance companies will set a default sum insured on renewal, based on the cost per SQM to rebuild and based on the house being normal without added extras like significant retaining walls and special architectural features. It will be up to owners to change that.
  • If a new purchase is imminent, insurance companies or brokers (and the owner for that matter) will need extra time to arrange certificates for banks and the like, unless an interim sum insured is set by the owner.



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