Are You Underinsured?
The NZ Guide
An estimated 45% of NZ homes are underinsured — meaning their sum-insured is too low to fully rebuild after a total loss. With construction costs up 35–45% since 2019, a policy set in 2020 may leave you $100,000–$300,000 short.
No-Obligation Quote
35–45%
NZ construction cost increase since 2019 (RLB)
~45%
of NZ homes estimated to be underinsured (IAG 2024)
$300K
NHCover cap — well below average NZ rebuild cost
$150K+
Average shortfall per affected home at total loss
Why NZ Rebuild Costs Have Exploded
It's not just inflation — there are specific structural reasons why NZ construction costs have risen so sharply since 2019:
Construction labour shortage
Post-COVID labour market tightening pushed tradesperson rates up 25–40% between 2020 and 2023 alone.
Building material inflation
Global supply chain disruptions caused structural timber, steel, and concrete prices to spike. Costs remain elevated through 2025.
Christchurch rebuild effect
The decade-long rebuild absorbed significant South Island construction capacity, keeping labour costs structurally higher across NZ.
Cyclone Gabrielle reconstruction
The Hawke's Bay rebuild from February 2023 is putting additional pressure on contractor availability and pricing in the region.
Consent and compliance cost increases
Building consent fees and compliance costs have risen as councils adapt to increasing workloads and new regulatory requirements.
What Underinsurance Looks Like at Claim Time
These scenarios use a typical NZ home with a true rebuild cost of $700,000 (a 180m² home in Auckland, 2025 rates):
Sum Insured
$720,000
NHC pays
$300,000
Insurer pays
$410,000
Shortfall
$0
Sum Insured
$520,000
NHC pays
$300,000
Insurer pays
$220,000
Shortfall
$180,000
Sum Insured
$380,000
NHC pays
$300,000
Insurer pays
$80,000
Shortfall
$320,000
These are illustrative scenarios. Actual claim outcomes depend on policy terms, insurer assessment, and specific loss circumstances. Rebuild cost is assumed at $700,000 for a 180m² Auckland home using 2025 construction rates.
Your Underinsurance Checklist
Answer "yes" to any of these? You may need to review your sum-insured:
- When did you last update your sum-insured?
- Was your sum-insured set before 2020? (costs up 35–45% since then)
- Does your sum-insured include professional fees, consents, and demolition (add ~12%)?
- Is your garage, deck, pool, or retaining wall included in the sum?
- Have you renovated since setting the sum-insured?
- Has your insurer offered a free sum-insured review or calculator?
Use Our Rebuild Cost Calculator
Get an indicative rebuild cost estimate based on your home's size, construction type, and location.
Open CalculatorTalk to an Adviser
A licensed NZ adviser can review your current policy, compare alternatives, and recommend the right sum-insured for your property.
Get a Policy ReviewRelated Guides
Home Underinsurance Deep Dive
Detailed guide to calculating your rebuild cost
Rebuild Cost Calculator
Estimate your sum-insured online
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Earthquake Insurance
NHCover gaps and seismic risk
Cheap Buildings Insurance
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Compare NZ Insurers
Find better cover at better rates
Don't Wait Until Claim Time to Find Out
A licensed NZ adviser will review your sum-insured, compare it against current rebuild cost data, and recommend the right level of cover for your property.