​Home and Contents Insurance

We explain everything to know about home and contents policies, and why home-only insurance may be a more cost-effective and suitable option

Updated 5 May 2020

​​Home and contents insurance covers your property and possessions in case of an earthquake, fire, storm damage, theft and more. Despite its wide-ranging benefits, policies are becoming increasingly expensive, forcing many homeowners to think more about what they really need cover for. While building cover is essential, many homeowners are now comparing policies in greater detail, and in some cases, dropping contents cover altogether to save on the overall cost of home insurance.
 
In this guide, we outline the pros and cons of home and contents insurance. Most insurers combine both their home policies and contents policies when 'selling home and contents', and will offer a discount if you buy them together at the same time. This means it can, but not always, be cheaper to get a combined policy.

Are you renting? If so, home insurance isn’t for you – our contents insurance guide covers everything.
Are you a landlord? Our landlord insurance guide outlines everything about protecting your investment.

Our Guide covers:

• Read this first – do you need contents insurance?
• What’s covered under a ‘home’ and 'contents' policy’?
• ​Home and Contents Insurance Policy Best Buys
• Pros and Cons of Including Contents in a Home Insurance Policy
  
• What to look for in a home and contents insurance policy
• ​​Home and Contents Insurance Frequently Asked Questions

Insuring for convenience vs inuring for what you can’t afford to lose

• We believe that homeowners should only insure what they can’t afford to lose. As such, it’s unlikely anyone could afford the loss of their home, so the replacement amount should always be fully insured.
• However, if you could afford to lose your TV, sofa, stereo, laptop and furniture and not be in financial strife, removing contents insurance (which from our research costs an additional of between $200 and $400 for $25,000 of cover) can save considerable amounts if you look at the long-term cost.
• Many New Zealand homeowners are looking at dropping contents insurance, and media reports suggest they would be comfortable with shopping for used goods to replace existing possessions in an all-out loss situation. 
• ​A one-off single loss, such as damage to a TV or sofa, will still incur a claim excess ($250, $300 or more) and a reassessment of your insurance policy price the next year, so one claim can end up costing a significant amount upfront and later on. 

​Read this first – do you need contents insurance?

• Unlike home insurance, your mortgage provider won’t insist on you having contents insurance. However, if disaster strikes and your house burns down, or more commonly, someone burgles your home, contents insurance will prove useful.
• Contents insurance comes with a cost, and the value for money policies offer is up for debate. You can insure a $400,000 house for as low as $750 a year, yet $25,000 of contents can cost $500 or even $700 if bought outside of a home insurance policy. If you’re already fighting rising insurance costs, losing contents cover can be a quick win if you think it’s worth the risk.
• Assessing whether contents insurance is going to be cost effective involves estimating the total value of your personal household possessions.
• If you don’t own much more than a TV, laptop and phone, a musical instrument and perhaps some low-value jewellery, contents insurance may not be worthwhile. Every claim will come with an excess of at least $250, and you will lose a no-claim bonus and face increased policy costs.
• If you have a burglar alarm, are members of a Neighbourhood Watch group, live in a low-crime street and have items of low value, dropping contents insurance and buying home insurance only could save you up to $3,000 or even $5,000 over five years.
• We have made a comparison between home and contents and home-only insurance in this guide to help make an informed decision regarding the cost versus the benefit.
• Your home and contents insurance premium will likely increase year on year, even if you haven’t bought any new items covered by your contents insurance.

What’s covered under a ‘home’ policy’?

The primary things a home insurance policy covers include:

• Your residential building, including garages
• Other structures in your property like a garden shed and fences
• Domestic fixtures and fittings – these are the items that are permanently attached to your house, such as built-in wardrobes, kitchen cupboards, dishwasher, oven, flooring etc.
• Permanent structural improvements - for example, an extension to your home

What’s covered under a ‘contents’ policy’?

The primary things a contents insurance policy covers include:

• Furniture and furnishings, including sofas, beds, mattresses, sheets, chairs, tables etc
• Computers, kitchenware and electrical appliances
• Clothing and shoes
• Carpet and rugs
• Portable items – these can include bicycles, jewellery/watches, musical instruments, photographic equipment and sporting equipment, as examples. An extra premium may be charged by some insurers, and limits will apply. In almost all cases, you will need to specify your personal items if you want a set level of cover.
• Blinds, curtains and window coverings.

Home and Contents Insurance Policy Best Buys

​Buying a COMBINED policy vs separate home and contents policies

• ​We selected six major insurance and financial services brands which offer home and contents insurance throughout New Zealand.
• Quotes were based on home replacement cover of $450,000, and contents cover of $25,000, with no individual special-cover items. 
• Excesses are stated below and are based on one claim per event.
• Best value insurers: Overall, AMP and AMI offered the best-value policies, with AA Insurance and Warehouse Money being the most expensive. 
• How to get the right policy for your home: Comparing house and contents insurance quotes between 4 and 6 insurers is an effective way to save money, as quotes will vary. Best of all, all you will need is your home address and any goods specifics. 
• We have compared the quotes received to stand-alone home insurance, which we obtained from our guide to home insurance.​

​Disclaimer: Specific Home and Contents Insurance policies and their terms and conditions differ between insurers. We make no representation that the quotes below imply that the policies are the same in form and substance. Please review individual policies in detail before making any decision.

• ​We obtained quotes for nine properties in locations all over New Zealand.
• For an easy-to-follow policy comparison between all house and contents insurance providers, download our PDF table.

Home and Contents vs Home Only Policy Costs

1. In conducting our research, we found insurance policies including contents can be as much as 48% higher than standalone home-only policies.
2. The average home and contents policy cost 25% more than home-only in our research of six insurers for homes New Zealand-wide, as our comparison table shows here.

Pros and Cons of Including Contents in a Home Insurance Policy

Pros:

1. You can choose a policy which will replace damaged or lost items, meaning if you accidentally damage something, you will be covered for a replacement.
2. If you lose or damage items outside your home, such as cameras, laptops and jewellery, some home and contents policies will cover this.

Cons:

1. As noted above, we identified insurance policies including contents can cost as much as 48% more than standalone home-only policies. The average home and contents policy cost 25% more than home-only in our research of six insurers for homes New Zealand-wide, as our comparison table shows here.
2. Excesses apply to every claim, meaning damaging an $800 laptop or $700 phone could cost a good proportion in excess, and you will lose any no claims bonus (if offered by the insurer)
3. Each policy has its own terms and conditions and a number of exclusions (meaning things that aren’t covered), so you will need to know what you can and cannot claim for.
4. Most policies have limits on the amount of cover – for example, jewellery, art and bicycles, so it’s important to ensure that these are sufficient for your circumstances.

What to look for in a home and contents insurance policy

1. ​Affordable cover – make sure the insurance policy is within your budget with an excess you can arrange should you need to make a claim. Also, if possible, prepaying it upfront for 12 months can usually save 10-20%. 
2. Temporary accommodation – a good policy will include a lump sum amount if your home becomes unliveable due to an insured event.
3. New-for-old replacement - if your belongings are stolen or damaged beyond repair, an insurance policy that replaces the items with new ones means you won’t get shortchanged with a low payout for the items’ current value.
4. Legal liability – if you cause damage to someone else’s property at your home (home cover), or anywhere in New Zealand (contents cover), you won’t be personally liable for compensation costs.
5. Debris removal, land work and extra rebuilding costs – the sum insured is for your house materials and labour, but there are many other costs such as demolition, professional fees (i.e. architect, surveyor) and council building consent fees, as well as the storage of undamaged contents. A good policy will make an allowance for these.
6. Locks – a good policy will include an excess-free payment if someone burgles your home and you need to change the locks.
7. Mortgage discharge – if your home is destroyed, a good policy will include legal and administrative costs to discharge your mortgage.
8. Inflation protection – building costs keep increasing; a good policy will consider inflation rates specific to building work (labour, materials) and make an adjustment automatically to your sum insured.

Home and Contents Insurance Frequently Asked Questions

If I make a claim for loss or damage to my home and contents, will I have to pay two excesses?

​For most policies, one event (such as a fire, earthquake or flood etc) will cover all claims for both home and contents damage. For this reason, you will only pay one excess. 

Will my home repairs be guaranteed?

Most policies offer a lifetime guarantee on home repairs. For example, if the insurer repairs or rebuilds your home, there will be a guarantee for the quality of materials and workmanship of that work for the lifetime of your home while you own it. This usually is limited to work the insurer has authorised, arranged and paid for directly. Any defects will be rectified by the insurer.

​Do I need to list, or specify, contents on my policy?

This depends on you. Many items will be covered as standard, but only up to a set benefit limit. For example, a $2,000 limit per item on camera equipment. If you have high-value items you want to insure, you will need to list those that are valued above the standard benefit limit.

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Related Guides

• Home insurance
• Contents insurance
• Home sum insured calculator
• Trade Me Selling Tips – make selling down your possessions (and reducing the need for contents insurance) easy and successful