Insurance advice for Wellington homebuyers

One property expert is urging people buying or selling property in Wellington to start looking at insurance now, following the announcement that New Zealand’s largest insurer, IAG, is adopting a conservative approach to house and contents insurance in the region.

While the Earthquake Commission (EQC) has a role to play, private insurance is necessary, Tall Poppy Real Estate founder and director David Graves said.

“EQC’s exposure on buildings is limited to $100,000, so private insurance is required (land exposure is uncapped),” Graves explained. “If a buyer can’t obtain appropriate insurance cover, it’s unlikely they will be able to secure mortgage finance - and a sales and purchase agreement may not be finalised.

“Working with an insurance broker can help you navigate the current insurance landscape, and also check in with your bank to see if any options are available. If you’re uncertain about anything to do with insurance, you should contact your lawyer or salesperson to work through any potential issues,” he added.

Read more: IAG stops offering contents insurance to new customers in Wellington

Graves outlined some tips that people currently buying or selling can consider:

• If you are a seller; ensure any agreement you sign is subject to the buyer obtaining appropriate insurance cover. If you’re concerned about the insurance position of your buyer, then double check with your lawyer or salesperson before signing a sales and purchase agreement;
• If you are a seller and have accepted an offer, unconditional or otherwise, double check the insurance position with your lawyer or salesperson;
• If you are a buyer and have made an offer that’s gone unconditional and you don’t have insurance, consult your lawyer and salesperson as soon as possible.