Compare Comprehensive House Insurance

What is Comprehensive House Insurance?

We explore what comprehensive home insurance covers and how it stacks up against basic home insurance. Whether you’re a first-time homeowner or just looking to understand your current policy better, here’s what you need to choose the right level of cover.

Comprehensive home insurance is the gold standard in home protection, covering you for a wide range of incidents:

Accidental damage: Accidents happen. Let’s say you’re painting your living room and accidentally knock over a paint can, damaging your expensive oak floor. Comprehensive insurance has got you covered. For a full list of insured incidents, be sure to check out the product disclosure statement (PDS) of your chosen insurer.

Natural disasters: New Zealand is no stranger to earthquakes and other natural disasters. Such unpredictable, catastrophic events are typically covered under a comprehensive policy.

Legal liability: Comprehensive insurance often covers legal expenses and compensation claims if someone is injured on your property due to your negligence.

Smoke and fire damage: Fires can be devastating. Comprehensive insurance can cover the cost of repairs or rebuilding your home if it’s damaged by fire or smoke.

Vandalism: Comprehensive insurance can help you fix damage if someone vandalises your property.

Water damage: Water damage, like from a burst pipe, is usually covered. However, flooding from natural disasters or sewer backups may need separate policies.

Temporary accommodation: If a significant event makes your home uninhabitable, comprehensive insurance typically covers the cost of temporary housing while your home is being repaired or rebuilt.

Comprehensive House Insurance vs Basic House Insurance

Comparing comprehensive home insurance with basic home insurance is a bit like comparing a fully-equipped motorhome with a tent. Both provide shelter but offer vastly different levels of comfort and protection.

While basic home insurance covers your home against common risks like fire and storm damage, comprehensive insurance covers these events and more, like accidental damage cover and temporary housing costs.

The basic cover is enough for some, but if you want extra layers of protection and more peace of mind, comprehensive home insurance could be a better option.

Home and contents insurance

Home and contents insurance is a combined policy, not a single insurance product. These policies include features of both home insurance and contents insurance.

• Home insurance covers the cost of repairing or rebuilding your home in the event of damage beyond your control, such as from a storm or fire.
• Contents insurance covers the cost of repairing or replacing household possessions and furnishings, including clothing, jewellery, appliances, and electronics.

While some homeowners may only need home or contents insurance, for many, it makes sense to take out a combined policy to cover both.

What to consider when choosing comprehensive home insurance

Check the coverage level: Make sure the insurance covers the full cost of rebuilding your home. Further along, we explain more about ‘sum insured’ and getting the amount for rebuilding right.

Understand your excess: Know what an excess is — the money you pay out of pocket in relation to your insurance claim. The higher your excess, the less you pay for insurance each month. So think about what you can afford to pay in an emergency situation.

Cover your high-value items: If you have anything precious in your home, like pricey jewellery or art, you might need extra insurance to cover these.

Think about flood insurance: If you live somewhere floods can happen, you might need to get flood insurance. Regular home insurance doesn’t usually cover floods.

Check what the policy includes: Some will cover medical payments if someone gets hurt on your property. Also, they can protect you if you accidentally hurt someone or damage their property, no matter where you are.

Know your insurer: Look at how reliable the insurance company is and how easy it is to get in touch with them. You want a company that’s there for you when you need them. It’s also a good idea to compare payout rates across insurers. When it comes time to make a claim, the last thing you want to do is jump through hoops to get a payout.

Yearly check-up: When your life changes, your insurance needs might change too. Make sure to chat with your insurance company and compare different insurers every year to ensure you have the coverage you need.

Rental properties: If you’re renting out a property, you need different insurance than a homeowner who lives in the property. Be sure to get the right type.

Read the fine print: Understand what the policy doesn’t cover. If you need extra coverage, ask about it and add it to your policy if you can. It’s better to know what’s not covered before something happens.

Sum insured and excess explained

The ‘sum insured’ is the maximum amount your insurer will pay if your home is completely destroyed. It’s your responsibility to determine this amount, ideally based on current building costs rather than the home’s purchase price or market value.

Here’s how you can get it right:

Use an online calculator: Many insurers provide online calculators to help estimate the cost of rebuilding your home, giving you a ballpark figure for your sum insured.

Seek professional advice: Builders, architects, quantity surveyors, or property valuers can provide a more precise estimate of your home’s rebuild cost.

Insurance for Investors, Renters, Builders, and Renovators

Different types of property owners have specific insurance needs. Investors should consider the landlord’s policies to protect their property and income in case tenants cannot pay or the property becomes uninhabitable due to covered perils.

Renters should consider renters insurance to safeguard their belongings and provide liability coverage. Builders and renovators should consider builders’ risk insurance to protect their projects during construction.

Tips to Save on Comprehensive Home Insurance

Even with comprehensive coverage, there are ways to save on premiums:

Increase your excess: Agree to a higher excess in exchange for a lower premium. But remember, this means you’ll need to pay more out of pocket when you claim.

Look for discounts: Many insurers offer discounts if you install security systems or are a new customer.

Compare policies at renewal: Don’t auto-renew your policy; shop around to see if you can find a better deal. Compare policies today!