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Building Insurance

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How much does building insurance cost?

The cost of building insurance in New Zealand typically averages between 0.2% to 0.5% of the value of the rebuild cost of the building per year. This cost can vary widely depending on the type of business, type of tools, location and sum insured. 

What is the average cost of building insurance? 

In New Zealand, you can generally expect to pay between 0.2% to 0.5% of the value of tools insured per year. That means to insure a $2,000,000 building it could cost $500 per month.

Buildings situated in areas more prone to natural disasters can cost more to insure. This is due to the higher risk of damage, which insurers take into consideration when calculating premiums.

Understanding Building Cost Factors

Three primary factors can influence the cost of building insurance:


Insurance providers consider the geographical location of a building when setting premiums. Buildings in urban areas with excellent fire protection services often have lower insurance costs than those in rural areas. Additionally, the proximity to coastlines or flood-prone areas can increase insurance costs due to the heightened risk of water damage.

Construction Material

The materials used in the construction of the building can significantly affect the cost of insurance. Buildings constructed with non-combustible materials like concrete or steel often attract lower insurance premiums compared to those built with combustible materials such as wood.

Risk Profile of the Area:

The risk profile of the area where your building is located also influences insurance costs. High-risk areas include those prone to natural disasters like earthquakes, floods, or landslides. If your building is in such an area, insurance costs may be higher to account for the increased risk.

Building Insurance Provides Cost-Effective Protection for Your Building

Building insurance is a strategic investment for businesses. Here are three key ways it provides protection:

Covers Physical Damage

Building insurance, often referred to as ‘material damage’ insurance, provides coverage for physical damage to the structure of your building. This damage can be due to a multitude of reasons such as fire, storms, theft, or even vandalism. By having a robust insurance policy, you can ensure that your building is covered, keeping your business assets secure.

Secures Investment

Buildings are significant investments. Whether you own a small storefront or a large commercial complex, any damage can result in considerable financial loss. Building insurance helps protect this investment by covering the costs of repairing or rebuilding due to insured events.

Protects Business Continuity

If a disaster or unforeseen event damages your building, it can severely disrupt your business operations. Building insurance enables business continuity by taking care of the repair or rebuild costs, helping you get back to business sooner and minimizing the financial impact of the disruption.

It’s crucial to have building coverage if you

  • You own a building 
  • Your building is in a high-risk area
  • The building is constructed with combustible materials 

How can you save money on building insurance?

Even though building insurance is a necessity, there are still ways to save money on it.

Use a Broker

Brokers like Gerrards have access to many insurance providers and markets that businesses do not have access to. This wide network allows us to compare many different offers and choose the one that gives you the best coverage for the least amount of money. Think of us as your secret weapon for getting the best insurance deals.

Bundle Your Policies

Insurance providers often offer discounts if you purchase multiple policies from them. This method, known as bundling, could allow you to combine your building insurance with other types of business insurance, such as plant, equipment or liability insurance, and save money.

Increase Your Excess

The excess is the amount you agree to pay out-of-pocket before your insurance kicks in. By agreeing to a higher excess, you can reduce your premium. However, it’s crucial to ensure you can afford the deductible if you need to make a claim.

Implement Safety Measures

Proactive steps towards making your building safer can lead to insurance discounts. These could include installing a fire suppression system, a security system, or earthquake-proofing your building. The reduced risk can often result in lower premiums.

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