Make the most of your home insurance

It’s vital to focus on setting an accurate sum insured. If your home is destroyed by an event like a fire or natural disaster, the sum insured on your policy is the maximum amount your insurer will pay to rebuild your home. Please be careful not to confuse your insurance sum insured with the market value of your home. 

As the sum insured is based onrebuild costs, it’s important to set a figure that reflects today’s construction costs.

The cost to build a new house in New Zealand's residential construction sector saw its first decline in 12 years this July*. This makes it an ideal time to assess your sum insured and to consider an updated property valuation to ensure you have the right cover.

The more accurate your sum insured, the more likely it is that your home will be rebuilt using similar materials and based on the same standard it was just before the loss. 

Your broker can help you set an accurate sum insured by:

• Sharing helpful online tools, such as the Cordell Sum Insured Calculator. This calculator can provide you with an estimated rebuild cost for 12 to 18 months.

• Providing details for a registered valuer or quantity surveyor, so you can get a professional valuation for your home. This is a good option if your home has been recently updated or is architecturally designed.

Our brokers will work with you to ensure you check your sum insured at least annually.

If you’re in the market for a new home or investment property, here are some top tips to guide you:

1. Talk to your broker: 

Your broker can help you understand insurance costs, excesses and how insurers may view the risks associated with your potential new property

2. Key factors to consider:

• The size, age, condition and location of the home.
  

• Natural hazard risks – For example, is the property located in a flood zone and have the council put any ‘sections’ on the home? It’s important to check the Land Information Memorandum (LIM) report before you purchase a property as these imposed ‘sections’ may impact the insurability of the home.
  

3. Check with the vendor: 

It’s a good idea to find out from the vendor which insurer currently insures the house and any previous damage, losses and claims history at the property. This information can help you avoid any surprises if you purchase the property.  

By understanding your insurance options, you are better equipped to make an informed decision before purchasing your new home.