Search

Is Your Home an Insurance Risk? Get Instant Feedback and a Quote Based on Your Address

Our guide outlines the typical risks of insuring a home, how to identify your home's insurance risk(s) using trusted tools, how to switch home insurers, and frequently asked questions.
Updated 20 June 2024
Summary
  • With more homes becoming insurance risks, particularly in high-risk areas, the average cost of insuring a home can be up to three times higher than in low-risk areas. Some insurance companies are reluctant to insure in high risk areas.
  • In 2019, RNZ reported that AMI and the State refused to take on new homes in the Wellington region. In April 2024, a report from the Reserve Bank (discussed in an RNZ story) outlined the increasing costs for homes in higher-risk areas. We don't see this problem going away.
  • Our study of the average cost of insurance reveals the much higher costs for a standard home policy in Wellington and the Hutt Valley than in cities like Dunedin and Hamilton. Our guide to difficult-to-insure areas has more information. 
  • We've published this guide to help you identify any risks with your home (or any home you're looking at), how to reduce them and what you can do to save money on ever-increasing house insurance costs. We rely on the instant quote and risk assessment tool from Initio, given its unmatched property data. Whether you're a homeowner or a potential buyer, Initio enlightens you about your options and highlights potential concerns, such as flood, landslip, instability, tsunami or earthquake risks.

Our guide outlines typical risks affecting home insurance and tools to identify such risks. We cover ​
Related resources: Our trusted go-to guides for Insuring an Old House and Difficult Areas for House Insurance explain what you need to know should either of these issues apply to you.

​Advertising Disclaimer: We may receive compensation if you buy an Initio policy after using their tool. However, our primary intention is to provide you with a reliable and accurate assessment of your home's insurance risk. By getting an instant risk assessment and quote from Initio, you can compare policies effectively and make an informed decision that best suits your needs. We share Initio's tool throughout this guide because of its robust data and ability to offer transparent and instant feedback on your home insurance needs.

Understanding the Typical Risks of Insuring a Home

​Insurance companies calculate policy costs based on the risk of insuring your home. Higher risk factors typically lead to higher premiums, as insurers must account for the increased likelihood of claims. This means certain homes in Wellington (earthquake risk) and parts of Auckland (flooding risks) will cost more to insure than homes in Dunedin and Hamilton, for example, which are seen as low risk given they don't tend to flood, sit on a fault line or suffer from a disproportionate number of crimes.

Key risk factors that affect the cost of insurance include:
  1. Location: Homes in areas prone to natural disasters such as floods (Auckland, Hawkes Bay, Westport, etc.), earthquakes (Wellington, Christchurch, etc.), storms (Coromandel, West Auckland, Esk Valley, etc.), and high crime (Auckland CBD, South Auckland, and parts of Christchurch, etc.) will generally have higher premiums. Our guide to difficult-to-insure areas explains this risk further.
  2. Age of the Home: Older homes might have outdated electrical systems, plumbing, or roofing, which can increase the risk of damage and thus result in higher premiums. Our guide to insuring old homes has more information.
  3. Occupancy: Homes that are unoccupied for long periods, such as holiday homes or investment properties, are at higher risk for issues like burglary, vandalism, and undetected damage from leaks or other problems. Due to this increased risk, insurers may charge higher premiums for these properties.
  4. Water Supply: The source and reliability of a home's water supply can impact insurance risk. While most homes in New Zealand are connected to a council's water supply, remote properties relying on tank water, wells, and/or outdated plumbing systems face higher risks of water contamination, pipe bursts, insufficient water pressure for extinguishing fires, and potentially higher insurance costs.
  5. Security Measures: Insurers tend to favour homes with security systems and smoke alarms. These deter crime and lower the risk of damage should there be a problem.
  6. Construction: The materials and methods used to build your home can affect its risk profile. Homes built with fire-resistant materials may receive lower premiums than those constructed with more flammable materials.​
  7. Land stability and retaining: Insurers consider the slope, land stability, and how it is retained or protected when deciding to provide cover. They also look at the height and scale of any retaining walls on the property.

The Benefits of Identifying Risks Early

​​Home insurance costs vary significantly between insurers, as our comprehensive comparison research highlights. By taking the time to identify and understand your home's insurance risks, you can take proactive steps to mitigate them and avoid unfavourably priced insurance policies that penalise you disproportionately for the actual risk. Identifying your home's risks as soon as possible is beneficial for many reasons:
  1. Cheaper policies: Addressing occupancy issues can reduce your policy cost, as can simple actions like regularly maintaining the property.
  2. Better coverage selection: Whatever the risks, you need to ensure the policy sufficiently covers them without low limits - don't be caught out with a policy that pays less than the value of the repair or replacement by not reading your policy documents in advance.
  3. Avoiding unreasonable penalties and high pricing: Many New Zealanders increasingly live in flood zones or earthquake-prone areas due to changing climate conditions and tectonic activity. As a result, insurance premiums can be significantly higher. However, not every insurer discourages risky homeowners from getting a policy by quoting a high policy cost or refusing new policies altogether (as AMI and State have done previously in Wellington). 
​
​Our View: A comprehensive comparison of all insurance options is the best way to find a policy that offers the best benefits and coverage at the lowest price. If you live in a difficult-to-insure area or own an old home, you will need to put more time into sourcing quotes, given insurers will usually need to work with their underwriters to get you a custom quote.

MoneyHub Founder Christopher Walsh Explains How Our Friends at Initio Offer Instant Risk Feedback and Insurance Quotes For Almost Every House in New Zealand:

Christopher Walsh
MoneyHub Founder
  • Empowered by Data: We trust Initio Insurance for transparent home insurance insights backed by robust data that other insurers can't match.
  • ​Instant Risk Assessment: Don't wait or wonder - the risks and costs are too high. With Initio, you can gauge your home's insurance risk in seconds. Simply enter your address and receive instant risk feedback and a quote.
  • Transparent Process: Instantly get a policy cost quote. While some cases might need more review, you are assured of accuracy and reliability.
  • Unparalleled Insight: Dive deep into Initio's unmatched property data. Whether you're a homeowner or a potential buyer, Initio enlightens you about your options and highlights potential concerns, such as flood or earthquake risks.
  • Trusted & Reliable: Besides being award-winning, Initio is backed by IAG (owners of AMI, State, and others) and offers exceptional NZ-based customer service.
  • Click here to get free instant risk feedback and a quote.

How to Identify Your Home's Insurance Risk

  • A good place to start assessing your home's insurance risk is Initio's instant risk feedback and quote service. This tool provides detailed insights into your property's risk factors, allowing you to make informed decisions about your insurance coverage.
  • Initio's tool analyses factors such as location, construction type, age of home and occupancy status to provide summary risk feedback and insurance quote.

Initio's tool is straightforward:
  1. Enter Your Address: Simply input your home address into the tool.
  2. Get Instant Risk Feedback and a Quote: Receive a detailed risk assessment and an instant insurance quote based on your address.
  3. Adjust the Quote Based on Your Preferences and Risks: You can increase and decrease the excess and insured amount to find a price and benefit cover you're happy with.
Our View: The convenience and speed of Initio's tool are unmatched. Within seconds, you can obtain valuable insights into your home's insurance risks and receive a tailored quote. This immediate feedback allows you to make informed decisions without delays, ensuring your home is adequately protected - no other New Zealand insurer offers such functionality.

Know This: If you get an instant quote with no alert, then Initio does not consider your home risky - it's only when there is an issue that it shows (upon typing in the address). For most MoneyHub users using the Initio tool, the user experience will be an instant quote with no flags.

Initio's Insurance Risk and Policy Quote Tool in Practice

​Initio's tool offers instant quotes and risk detection for your home insurance needs. In the video below, MoneyHub Founder Christopher Walsh walks you through entering your address and explains the results, including the risk feedback and insurance quote.

To showcase the tool's effectiveness, Christopher uses two real-life examples, focusing on different types of risks:
  1. Petone: Tsunami and Flood Risk: Due to their proximity to the coastline and low-lying areas, Petone properties are at a higher risk of tsunamis and flooding. Christopher demonstrates how entering an address in Petone into Initio's tool provides an instant flood risk assessment. The tool's detailed feedback helps homeowners understand their specific flood risk and how it impacts their insurance quote.
  2. Wellington: Earthquake and Tsunami Risk: Wellington has significant earthquake and tsunami risks, which presents a complex insurance challenge. The video demonstrates how Initio's tool evaluates these risks by inputting a Wellington address.​

What should I do if Initio's tool identifies my home as high-risk?

If Initio's tool identifies your home as high-risk, there are a few practical steps you can take:
  1. Review your insurance options: Compare quotes from multiple insurers. Given the range of risk assessments, some may offer better terms or more affordable premiums for high-risk properties. It's important to shop around and not settle for the first quote you receive.
  2. Consider higher excess: Accepting a higher excess (the amount you pay before insurance kicks in) will lower your premiums. If your home is deemed high-risk, this is a trade-off worth considering, but you don't want to pay a high annual cost. The video below outlines how excesses alter the cost of a home insurance policy.
  3. Risk-specific policies: Look for insurers that specialise in high-risk areas. These companies may have more tailored coverage options that better suit your needs. Our guide to difficult-to-insure areas has more information.
  4. Document preventative measures: If you have taken any steps to mitigate risks (like installing pumps for flood prevention or securing heavy furniture to walls), make a note of these measures and inform your insurer. While it may not affect your policy cost, it may help with the underwriting process.

Important: If your property requires a referral or review by the insurer, provide as much detailed information as possible. This will maximise your chances of obtaining coverage. Underwriters (the individuals who decide whether to insure higher-risk properties) often address uncertainty by increasing premiums or declining coverage due to insufficient information. To avoid this, supply comprehensive details about your property to build their confidence and facilitate a favourable decision.
The video below outlines how excesses alter the cost of a home insurance policy:

How to Switch Home Insurers

Switching home insurers can seem complicated; however, this is a misconception. Thousands of New Zealanders do it every week, and it's a straightforward process that could save you money and provide better coverage. Our step-by-step guide explains how to switch home insurers smoothly:

1. Review your current policy
  • Examine your current benefits and cover: Understand your existing policy's cover (and limits), premium costs, and excess amounts. Our home insurance guide compares the differences in policies between insurers so you can do this efficiently.
  • Assess coverage needs: Consider any changes in your home or personal circumstances that might affect your coverage needs. In most cases, this will involve increasing your coverage for contents or including the value of any home improvements you've undertaken.

2. Use the risk feedback and quote to get a data point as you search for better rates to make a full comparison
  • Utilise Initio's tool: By inserting your address into Initio's instant risk feedback and quote tool, you can assess your home's current insurance risks and obtain an instant quote based on a detailed analysis of your property's risk factors, such as flood zones, earthquake-prone areas, and crime rates.
  • Compare quotes: Gather quotes from multiple insurers to compare policy costs and coverage. Ensure you compare like-for-like coverage to get an accurate comparison. Our home insurance guide compares policy benefits and limits to help you identify the best policy for your needs.
  • Evaluate the savings: Calculate potential savings by comparing the cost of your current policy with the quotes from other insurers. If the cover and benefits are the same (or even more comprehensive), it's arguably a reason to switch.

3. Contacting the new insurer and cancelling the old policy
  • Choose your new insurer: If you've found a policy that offers better coverage, benefits and/or lower premiums, contact the new insurer to purchase your new home insurance policy. Ensure that your new policy starts before or on the same day your old policy ends to avoid any coverage gaps.
  • Cancel your existing policy: Contact your current insurer to inform them of your decision to cancel it. Provide the necessary notice per your policy's terms and request a written confirmation of the cancellation. Ensure you understand potential cancellation fees and how they might affect your decision. The video below shows how to find the cancellation terms, and as a reference, Initio makes it incredibly easy to change or cancel a policy online and always provides a full pro-rata refund. In contrast, most other insurers require you to call them to make any changes or cancellations. Additionally, they often charge cancellation fees or have rules around minimum retained premiums.
  • Document everything: Keep records of all communications with your old and new insurers. Save emails, letters, and any other policy documents related to your policy change for future reference. While the risks of anything negative happening are low, it's important to protect yourself.

Our Must-Know Tips for a Smooth Transition and Avoiding Common Pitfalls:
  1. Avoid coverage gaps: Ensure that your new policy starts before your old one ends to maintain continuous coverage and avoid any gaps that could leave you unprotected.
  2. Check for refunds: If you've paid your current policy in advance, ask for any prorated refund you might be entitled to for the unused portion of the policy.
  3. Review new policy documents: Carefully review your new policy documents to ensure all the details are correct and that you understand your coverage. If you have any questions or concerns, contact your new immediately to get a full understanding.

Frequently Asked Questions

We have listed popular FAQs to help you understand your options.

Why isn't my home's flood risk on the Auckland Council flood map reflected in Initio's tool?

Initio's tool uses a combination of data sources to assess risks, including private data providers, national databases, and insurance-specific risk models. While the Auckland Council flood map provides valuable information, it might not always align with the home's comprehensive risk assessment criteria. Differences in the update cycle, assessment methodologies and the integration of additional risk factors could explain this discrepancy.

​How does Initio's tool assess earthquake risk for my property?

Initio's tool uses geological data, proximity to fault lines, historical seismic activity, and building structure characteristics to evaluate earthquake risk. This multifaceted approach ensures a thorough risk assessment tailored to your specific location and home construction.

Can using Initio's tool help me lower my home insurance premiums?

Initio's quote tool allows you to understand and potentially mitigate risks associated with your property. Addressing identified vulnerabilities, like outdated wiring or installing additional security measures, can lower premiums.

Why do insurance premiums differ significantly between high-risk and low-risk areas?

Insurance premiums are based on the likelihood of claims. Homes in high-risk areas (prone to floods, earthquakes, or high crime) or old homes with poor wiring are more likely to generate claims, leading insurers to charge higher premiums to cover these potential costs. Conversely, homes in low-risk areas have fewer associated risks, resulting in lower premiums.

How accurate are the instant quotes provided by Initio's tool?

The instant quotes provided by Initio's tool are highly accurate, utilising up-to-date data and sophisticated risk assessment models. However, final quotes may vary slightly based on additional information provided during the underwriting process and any specific insurer requirements.

Can I use Initio's tool for rental, investment properties and holiday homes?

Yes, Initio's tool can assess risks and provide insurance quotes for rental and investment properties, family baches and holiday homes. Please be aware that these types of properties may have different risk profiles and insurance needs compared to owner-occupied homes, which will almost certainly affect the quote.
Related guides: