Book an appointment here

House Insurance Legal Requirements

Get the right advice from insurance professionals

Or speak to a broker 0800 374 691


Is house insurance required by law?

Legal requirements of house insurance in NZ

In New Zealand, house insurance is not a legal requirement. However, if you’re seeking finance or a mortgage, most lenders will require you to have it.

Why is house insurance not legally mandatory in New Zealand?

No National Mandate

Unlike some other countries, New Zealand doesn't have a national law mandating all homeowners to have house insurance.

Personal Responsibility

New Zealand believes in the principle of individual responsibility. Thus, the decision to insure your property is left to individual discretion.

Different Types of Properties

Since properties can vary significantly, from urban houses to beachfront cottages, a one-size-fits-all insurance law might not be appropriate.

What does house insurance cover?

House insurance, often referred to as homeowner’s insurance, covers potential risks associated with your home. While policies can differ, they generally cover:

  • Damage to the structure of the home.
  • Damage or loss of personal belongings inside the home.
  • Legal liability for injuries or damage to other people’s property.

How does house insurance work?

Once you’ve chosen and purchased a policy, you pay a regular premium to your insurance company. If an event covered by your policy occurs, like a fire or burglary, you can file a claim. Depending on the terms of your policy and the nature of the damage, your insurance company will compensate you, either replacing, repairing, or providing a payout for your loss.

What are the advantages and disadvantages of house insurance?

When deciding on house insurance it’s essential to weigh the pros and cons:

  • Financial Protection: It protects you from potential significant out-of-pocket expenses due to unexpected events.
  • Peace of Mind: Knowing your biggest investment is safeguarded gives you peace of mind.
  • Lender Requirement: Having insurance can smooth the process of getting a mortgage or refinancing.
  • Cost: Premiums can be expensive, especially if you live in high-risk areas.
  • Deductibles: Before the insurance pays out, you may need to pay a certain amount out of pocket.
  • Policy Limitations: Not everything might be covered. It’s crucial to understand your policy’s specifics.

What are some common misconceptions about house insurance?

  • EQC Cover is Separate: Many homeowners mistakenly believe they need to get a separate EQC (Earthquake Commission) cover. In reality, when you purchase a home insurance policy in New Zealand, EQC cover is automatically included, which provides some protection against natural disasters such as earthquakes, landslips, and volcanic eruptions.

  • Houses are Valued at Market Rates: Insurance doesn’t base payouts on current market rates for buying or selling homes. Instead, policies typically consider the rebuild cost of the home. This rebuild value can fluctuate depending on various factors, including construction costs, materials, and local regulations. It’s important to review your policy regularly to ensure your home’s rebuild cost is adequately covered.

  • Insurance is Only for Mortgage Holders: There’s a misconception that only those who have a mortgage need insurance since it’s often a lender requirement. While it’s true that many lenders require house insurance, it’s a prudent decision to have insurance even if your home is mortgage-free to protect your investment.

How can Gerrards help?

At Gerrards, we pride ourselves on being experts in house insurance:

  • Tailored Advice: We understand that every homeowner and every home is unique. We can guide you to the best policy tailored specifically to your circumstances and requirements.

  • Streamlined Process: With our wealth of knowledge and industry connections, we ensure that the insurance process is smooth and straightforward for our clients.

  • Claim Assistance: If something goes wrong, Gerrards stands by your side. We help you navigate the claims process, ensuring a quicker and just resolution.

Ensuring your home, often your most significant asset, is of paramount importance. Gerrards is here to ensure you get the right coverage, giving you peace of mind that your home is well protected.

What our clients are saying