New Zealanders face rising insurance costs for car, house, and contents coverage, according to a recent report from financial comparison service MoneyHub.
The findings indicate significant regional variations and identify inflation, natural disaster risks, and escalating repair expenses as the primary drivers behind these increases.
MoneyHub’s analysis showed that house and contents insurance premiums have risen sharply over the past year, with regional differences reflecting varying risk levels.
Residents in Wellington often pay double the home insurance premiums of those in Christchurch due to heightened risks from earthquakes and flooding, according to MoneyHub.
On a broader scale, property insurance in the Asia-Pacific region is projected to grow significantly. A report by GlobalData forecasts premiums to reach $152.2 billion by 2028, up from $93.1 billion in 2023, representing a compound annual growth rate of 10.8%. This regional growth is expected to outpace the global average of 8.1% during the same period.
Car insurance costs in Auckland’s Mangere are noticeably higher than those in other areas, including Wellington, due to differing crime rates and repair costs, according to MoneyHub.
A March survey by Interest.co.nz revealed that rising car insurance premiums are leading more New Zealanders to choose basic third-party coverage instead of comprehensive policies. The survey of 562 respondents found that increasing costs have pushed many to cut back on their coverage to save money.
Data from Stats NZ underscored the financial pressures facing households, with insurance costs rising by 14% in the year ending March 2024.
The report highlighted how premium rates can vary significantly between providers, sometimes by hundreds of dollars for comparable coverage.
Christopher Walsh, MoneyHub’s founder, said sticking with the same insurer year after year might not be in the consumer’s best financial interest, highlighting the importance of seeking broker advice.
“Many insurers offer attractive rates to new customers, meaning existing clients may find themselves overpaying for coverage that could be cheaper elsewhere,” he said.
He also acknowledged the ongoing challenge of rising insurance costs, particularly the impacts of natural disasters and high repair costs.
“The increasing frequency of natural disasters and rising repair costs mean that annual premium increases are likely here to stay,” he said.
MoneyHub’s 2024 report aims to provide transparency for New Zealanders navigating the current insurance landscape. The platform plans to release annual updates to keep consumers informed about changes in the insurance market and provide tools to help mitigate rising costs.
