Is home insurance a necessary evil, or something that you'll be better off not investing in?
If this sounds like an internal debate that you've had with yourself too many times, let us set the record straight. Home insurance isn't just something to tack onto your property on a whim, it should be an imperative part of your planning. To cut the jargon out of the sometimes tricky concept of home insurance, we spoke to Goran Loncar, one of our registered financial advisers.
New Zealand's relationship with home insurance
Home insurance in New Zealand can be split between pre- and post- Christchurch earthquakes. Prior to the major quakes of 2010 and 2011, most homes were insured for a replacement value which was set at a general consensus of $2,000 per square metre. When the quakes hit, this value simply wasn't enough and many insurers had to be bailed out by the government.
Goran explained that this has changed the game of home insurance with clients or the insured now responsible to provide a rebuild cost or sum insured to the insurance company.
"Every home needs to be insured with a correct sum insured regardless of having a mortgage over the property or not," he said.
Why get your home insured?
Of course, there are many more risks to owning a home than simply natural disasters. Whenever an accidental event occurs, home insurance is your financial lifeline and will ensure you and your family can make solid plans for the future. The benefits of home insurance can be broken into four categories:
How can Money Empire help you get the right home insurance?
Goran said that home insurance is a massive topic and not always easy for clients to navigate.
"We all know that most of NZ's population doesn't read their policy wordings and sometimes don't actually know what they are insured for and what they can or cannot claim for," he said.
At Money Empire, simplicity is key. Of course, the home insurance policy is always going to include technical terms and concepts, but as long as clients know the tangible benefits of home insurance and how this relates to their lives, everyone is working together towards the same goal.
Goran also noted the importance of honesty. Home insurance providers don't always have the best reputation, but Money Empire works under the Latin Phrase of 'Uberrima fides' or 'utmost good faith'. We're always honest with insurance and expect the same from our clients – it's the personal touch that makes the relationship much stronger for the future.
If you would like more information about how home insurance can support your property goals, get in touch with our expert team today.