Home Insurance

IMPORTANT: Be 100% sure the property can get comprehensive home insurance before making any bid or offer on it!

Insurance is mandatory and critical

Home insurance is a mandatory condition of finance from any lender. You must be 100% sure that you can get insurance on the property before you make any sort of offer on it (including unconditional bids or conditional offers). I cannot stress this enough.

Auckland floods warning: Many properties in Auckland have "Natural hazards" listed on their LIM reports, and many insurance companies are now excluding coverage for natural hazards or overall insurance coverage. Be incredibly careful when evaluating properties, as even slight omissions on your part could be a very expensive insurance mistake.

Get the online quote sorted before

The simplest way to prepare is to obtain an online insurance quote in advance and save it. On the day before you go unconditional or are ready to pay the deposit, take out the policy. This ensures you are covered immediately and avoids delays in your settlement.

Insurance Brokers

In practice, insurance brokers are often not essential for single-home transactions. Their advice may be biased by commission incentives with certain companies. For most first-time buyers, going directly to an insurer is straightforward and efficient. If you already have consolidated policies or multiple properties, a broker might help simplify management.

Insurance certificate and bank

Once your home loan is arranged, you should register your lender’s interest on your insurance policy. This ensures the bank is protected in case of loss. Don’t worry if you don’t do this immediately; it can be amended later.

Re-build value

Post-Christchurch earthquakes, insurers calculate coverage based on the rebuild value, not the market value. The Cordell-Sum system is commonly used to determine this. Make sure your coverage reflects the true cost to rebuild your property, especially in a natural disaster scenario. This may be substantially higher than you expect, so do not underestimate it.

Insurance exclusions

Always read the fine print. Some policies exclude risks like coastal erosion, slips, or flooding. If your property is near the ocean or a slope, confirm exactly what is and isn’t covered—because if the worst happens, your insurer may not pay out.

Self-Insurance

Once you are mortgage-free and financially secure, insurance is technically optional—you could self-insure. This means you bear the risk yourself while redirecting what would have been premiums into investments. Be cautious, though: third-party liability still applies. For example, if a large tree falls from your property onto a neighbor’s expensive home, you could be liable for the damage.