Buildings Insurance FAQs

Buildings insurance in New Zealand covers the structure of your home including walls, roof, floors, permanent fixtures, built-in appliances, and other permanent improvements. Coverage typically includes damage from fire, theft, storms, floods, and other insurable perils. It does not cover earthquakes (covered by EQC instead), nor does it cover contents like furniture and personal items (which require contents insurance). The exact coverage depends on your policy type and chosen optional extras.

Buildings insurance is not legally compulsory in New Zealand, but it is highly recommended and often required by mortgage lenders. If you have a mortgage, your lender will require you to maintain buildings insurance as a condition of the loan. Even if you own your home outright, buildings insurance is essential protection against catastrophic financial loss from fire, natural disasters, or other damage. Most NZ homeowners carry buildings insurance for this reason.

Sum insured is an agreed fixed amount that your insurer will pay out in the event of a total loss. Full replacement value (or indemnity) means your insurer will pay the actual cost to rebuild or repair your home to its pre-loss condition, up to the policy limit. Full replacement is generally more comprehensive but may have a higher premium. Sum insured is simpler to understand upfront but requires you to estimate the correct rebuild cost. Most modern policies offer full replacement cover, which is recommended for better protection.

Buildings insurance does not cover earthquake damage. In New Zealand, earthquake cover is provided by the Earthquake Commission (EQC/Toka Tu Ake), which is a state-owned enterprise that provides automatic cover for most residential buildings. EQC covers up to $300,000 + GST for homes under the cap. However, some insurers offer optional "earthquake cover" or "natural disaster" extensions that can provide additional coverage above the EQC limit. Check your policy to understand your earthquake protection.

EQC (Earthquake Commission, now Toka Tu Ake) provides the primary cover for earthquake damage in New Zealand. When an earthquake occurs, EQC covers the first layer of damage (up to $300,000 + GST for residential buildings). Your buildings insurer then covers any loss above the EQC cap, up to your policy limit. This integrated system means you're fully covered for earthquake damage up to the total of both policies. Your buildings insurer handles the claim process and coordinates with EQC. It's important to maintain both covers and understand the interaction between them.

Several factors influence your buildings insurance premium: the rebuild cost of your home, its location (regional risk factors), the age and condition of the building, construction materials, distance from fire services, your claims history, the excess you choose, security features (alarms, gates), and the level of cover selected. Natural disaster risk, flood risk, and earthquake risk in your area also affect pricing. Newer homes with modern construction generally have lower premiums than older homes. Improving security and maintaining the property can help reduce your premium.

Yes, buildings insurance is essential for landlords in New Zealand. If you have a mortgage on the rental property, your lender will require buildings insurance as a condition of the loan. Even without a mortgage, buildings insurance protects your investment from catastrophic loss. As a landlord, you are responsible for maintaining the building structure in good condition. Many insurers offer specific "landlord buildings insurance" with appropriate cover for rental properties. Some policies include optional cover for landlord-specific scenarios like loss of rent during repairs.

Buildings insurance does not cover: contents (furniture, appliances you can move, personal items), earthquake damage (covered by EQC), gradual wear and tear, maintenance and repairs, damage caused by lack of maintenance, normal weathering, deliberate damage, some types of water damage (depends on cause and policy), damage from pests, and damage caused by your negligence. Some policies exclude certain perils or have specific conditions. Always read your policy documents carefully to understand what is and isn't covered. Speak to your insurer about optional extras if you need additional coverage.