2023 proved beyond doubt that house and contents insurance is absolutely vital, when the climate-change- charged weather events of almost a year ago shocked the country and made us realise how vulnerable we really are.
These disasters came at a time of historically high inflation and while that number may be improving, New Zealanders in most walks of life are truly doing it tough.
Rising prices are blowing budgets
Price rises have impacted practically all sectors of the economy – and especially at the supermarket, which tends to cause the most pain to our pockets and it’s tempting to skimp on items like insurance.
Witnessing the distress of those who were underinsured, or – worse still, not insured at all in the wake of the Auckland floods and Cyclone Gabrielle – almost a year ago now – it’s pretty clear that investing in house and contents insurance is a no-brainer. And while the price for cover is rising rapidly it’s important to note that this isn’t necessarily because the companies are greedy.
A heavy toll on insurers
In early December it was revealed that claims relating to the Auckland floods and Cyclone Gabrielle had cost insurers $2.7 billion, and a number are still to be settled. 56,607 house claims and 23,856 contents claims were received in the wake of the two events.
“Really good progress has been made on settling claims. Insurers are committed to finalising the remaining claims with their customers. We know some homeowners are waiting to settle until more is known about their local council voluntary buyout offer,” says Insurance Council Chief Executive Tim Grafton.
“Our message to homeowners is that your insurance claim needs to be completed before starting the property purchase process. As people will not be financially advantaged or disadvantaged by waiting, we encourage people to continue to work with their insurer to finalise their claim”.
Keeping insurance costs down
Having paid out such a huge amount it’s inevitable that insurance companies are having to hike their prices but there are quite a few ways to trim premiums.
One of the most obvious ones is to go for a higher excess, and you may be quite surprised at how much this can save you. Yes, it’s more painful to have, say, $1000 or even $2000, deducted from a payout as opposed to the more standard $500, but it’s important to remember that for most of us, making an insurance claim is actually a relatively rare thing.
Another way to bring insurance costs down is the use of home security products such as cameras, monitored alarms and deadlocks. Most large hardware chain stores sell reasonably priced security systems that you can connect to your phone, so as well as saving a little on your premiums, you’ll also have peace of mind.
And don’t forget smoke alarms – some insurers require you to have them and it goes without saying that it’s pretty risky on the personal safety side if you choose not to.
Is it worth shopping around?
While it’s true that some insurers will reduce premiums if you have all your insurance policies with them but in other cases you may be able to save more save by shopping around. You can do it yourself, but it’s time-consuming and often confusing, so that’s where Money Empire’s highly experienced insurance advisers come in.
With vast industry knowledge and contacts, they can help you find policies that fit your needs at a price you can afford and make sure that the cover you have is suitable – and sufficient for your unique needs.
We’re back on board on Monday 15 January, so do make a time to call or come and see us.