New Zealanders are experiencing significant increases in insurance premiums across home, car, and contents policies, as recent data reveals costs have escalated over the past year.
The Quashed Quarterly Index (Q3 2024) reported steep hikes in premiums for typical household policies, impacting affordability.
Compared to 2023, premiums across major types of insurance have risen notably:
Regional differences revealed Auckland as the costliest city for car insurance, with average premiums of NZ$1,579. Conversely, Wellington leads in house and contents insurance, with average premiums of NZ$4,467 and NZ$1,054, respectively.
These variations reflect regional risk factors, with higher home and contents premiums often linked to areas more susceptible to natural disasters.
Across age demographics, insurance costs have surged the most for those aged 40 to 50, who have seen general insurance expenses rise by 23% over the past year. Homeowners in the 25 to 30 age group, however, have been particularly impacted by house and contents insurance increases, with average house premiums rising 49% in the past two years.
Despite rising costs, Quashed data indicated that most New Zealand consumers have not adjusted their policies. Over 90% of policyholders maintained their sum insured and deductibles when renewing or shopping for new quotes.
The default deductible amounts tend to be NZ$250 for contents insurance, NZ$500 for car insurance, and NZ$1,000 for house insurance.
Adjustments to either deductible or coverage levels could reduce premiums by 8% to 10%, according to Quashed, and a combination of both could yield annual savings of up to 20%, though few policyholders are opting to make these changes.
According to Insurance Council of New Zealand (ICNZ) CEO Kris Faafoi, the increases reflect several compounding factors, including higher building repair costs, asset replacement expenses, and reinsurance rates.
He noted that insurers have been adjusting premiums to better align with increased risk levels from frequent severe weather events.
Additionally, Faafoi highlighted the importance of communication between consumers and insurers.
“Our message to people as if they’re finding those things difficult to speak to the insurers. There are lots of things insurers can do, looking at their policy details to make sure the settings are right for them,” he said.
