Property insurance rarely adequate

A new survey by property data and analytics company CoreLogic gives a detailed insight into the country’s established problem of home underinsurance amid high construction cost inflation, rising insurance premiums, and wider cost of living pressures.
The survey found:

• Almost a third (30%) of respondents are not confident their property is adequately insured, with 91% believing this is due to a lack of knowledge.
• One quarter (26%) of respondents with complete rebuild cover are not confident they are fully insured for the rebuild of their home.
• More than one third (38%) of respondents don’t know what their sum insured amount on their policy is.
• The average New Zealand homeowner last reviewed their home insurance cover nearly 2.5 years ago.
• Despite one in 10 (8%) respondents selecting their current insurance because of low excess, only two thirds (65%) know what their insurance excess amount is.

“People are paying for insurance, but if the sum insured is insufficient for the cost of rebuild, they are not fully covered and may only find out about this at the worst possible time.”

Moors says even the most risk-averse consumers can be underinsured quickly. “This plays into the confidence issue identified in the survey, with lack of understanding about rebuild/construction costs (69%) or the cost of a rebuild (64%) being the two most common reasons why respondents don’t feel confident their property is adequately insured.