House insurance, aka home insurance, is designed to protect the structures on your property – your house, plus other things like the garage and fences. House insurance also covers swimming pools and built-in spa pools. It’s important not to confuse house insurance with contents insurance, which looks after all the belongings in your home and garage.
As far as unfortunate events go, house insurance helps you to get your place fixed or rebuilt if it’s damaged or destroyed by extreme weather, fire, and natural disasters like earthquakes, tsunamis and volcanic eruptions. It also includes cover for smaller disasters caused by burglars, graffiti vandals, falling trees, crashing cars and the kid-next-door’s football. And if a pipe bursts inside your home causing water damage, you’re probably covered. You can also get house insurance policies that offer ‘keys and locks cover’ that pays to change your locks if your keys are lost or stolen. As icing on the top, some insurers will pay for your accommodation during repairs or rebuilding.
There’s one more thing that your house insurance will cover and it’s a biggie. Legal liability. This type of cover refers to the costs you could incur if you accidentally damage someone else’s property or injure somebody and the cause is related to your home. For example, if you have a house fire that also damages surrounding properties, legal liability cover can come to the rescue.
To get the clearest picture of what a house insurance policy covers, it’s best to talk directly to an insurance company or insurance adviser.
If you don’t have house insurance, there’s a good chance your finances will take a major hit if your home burns down or is swamped by a flooding event. Even a smaller disaster, like a burst dishwasher hose, can put a dent in your savings.
What are the different types of house insurance?
Most insurers in New Zealand provide fixed sum insurance, which means you and your insurer will agree on the amount your house is insured for (the ‘sum insured’). So if your home is insured for $450,000 and it burns down, your insurer will pay up to $450,000 to rebuild it.
What if rebuilding costs exceed your sum insured?
Can you choose a higher sum insured?
Basic or comprehensive house insurance?
You’ll notice that most insurers offer a choice of a basic or comprehensive policy. A basic policy will generally cover damage to your home and legal liability. A comprehensive policy will offer extra cover benefits, like alternative accommodation, gradual damage from leaking water, landscape restoration, and keys and locks cover. The extras in a comprehensive house insurance policy usually have a cover limit. Always check the policy wording carefully before you agree to buy a policy.