Insurance cover change coming this year

Friday 15 February 2013

Insurer IAG has flagged changes to its insurance policies this year that may mean they do not cover the full cost of rebuilding disaster-hit homes in future.

By The Landlord

Last year, the insurance industry signalled it was possible it would move to policies based on a determined value, rather than full replacement cover.

The value would likely be tied to a property’s CV.

That would give reinsurers more detail about what insurance policies were covering.

Fixed-cover policies were commonplace in New Zealand 20 years ago but competition between companies led to full replacement policies becoming the status quo.

Now IAG, which operates insurance brands State, NZI and AMI, among others, says the change will definitely happen this year.

“Across all IAG brands we can confirm the transition to specified Sum Insured home insurance product at some stage this year. We will be able to provide more comprehensive information and timings closer to the time of the change,” a spokeswoman said.

There have been warnings from Consumer New Zealand that property owners will need to be careful about what value their policies are fixed at, as it almost always costs more to replace a house than what it is worth.

An Insurance Council spokesman said insurers were deciding individually when to make the change.

Comments from our readers

No comments yet

Sign In / Register to add your comment

House Prices

S&P forecast 10% house price fall

Global ratings agency Standards & Poors is the latest to join the chorus of predictions around potential house price falls in New Zealand – and they’re picking a 10% drop.

Commercial

Augusta Capital takeover bid now unconditional

ASX-listed Centuria Capital has declared that its takeover of New Zealand property funds manager Augusta Capital is now unconditional, as it has secured nearly 66% of Augusta’s shares.

Mortgages

Advisers buoyed by strong property market

The New Zealand property market has emerged strongly out of lockdown, according to mortgage advisers, who say they are busy as ever this winter.

Site by PHP Developer