House insurance is an important part of owning a home, helping provide you with cover for when the unexpected happens. Your premium is based on different factors, including your claim history, the size and type of property you live in, and the natural hazards your house may be exposed to.
Here is a breakdown of those important factors we consider when calculating your premium.
Bad weather events
An increase in the frequency of bad weather across New Zealand has meant an increase in the number of claims made for natural hazard events like storms and floods. These more frequent events increase the number of claims insurance companies need to cover. In order to manage this increase in frequency and ensure they are able to pay out on claims for these events, insurers may need to increase their premiums.
Inflation and rising building costs
Rising building costs and regulatory changes can also affect the cost to repair or rebuild and these changes can affect your premium.
Your sum insured is reviewed each year, and this includes using information we receive from Cordell. This is just a suggestion, so it’s important you review and confirm, or change the amount, to ensure you are happy with it. The sum insured amount you choose is then used to calculate your premium at renewal time.
Reinsurance costs
Reinsurance is insurance for insurance companies. If there’s a large event that affects a whole community, reinsurance is there to help insurers cover the costs of claims. So, if something major happens, we can still pay out your claim and get you back on your feet as quickly as possible.
Due to increasing bad weather and other natural disaster events, both here and worldwide, reinsurance premiums are increasing. These costs are passed on to our customers through increased premiums.
Levy increases
Tower collects levies on certain insurance products on behalf of the government for some natural hazard events and for fire and emergency services. These are the Natural Hazards Insurance (NHI) levy, formerly known as the EQC levy, and the Fire and Emergency New Zealand (FENZ) levy.