Special edition: House premiums are on the rise
House premiums are on the rise, with 2022 seeing some of the biggest increases to date. To help you understand what is causing these increases, we want to break down how your premiums are calculated and the factors that insurers take into consideration when setting their rates.
Your Total House premium is made up of the Company (Insurer) Premium, Government EQC Levy, Government FireService Levy, and GST. Your insurer is responsible for collecting the GovernmentLevies and passing these on. Neither your insurer or Broker have any control over the amount of the Government Levies, nor do we receive any income from them.
What factors impact this?
EQC
With effect from 1st October 2022, the amount of EQC coverage per House was increased from $150,000+ GST up to $300,000 +GST. At the same time, the EQC Levy increased from $300 +GST up to $480 + GST; these charges apply to every House that is insured NZ-wide. The idea behind the increased EQC coverage was to move some of the high insurance costs away from high-risk regions such as Wellington &Hawkes Bay and spread the cost more proportionally across the country. The increased EQC Cover and Levy will be applied to your policy at the first renewal after 1st October 2022.
Inflation
Insurers, just like all other consumers, are facing increased costs when purchasing goods &services; as such, the cost of settling insurance claims is rising in line with the costs of providing replacement goods and securing repairers. Put simply, insurers are having to increase their premiums to be able to meet the costs of paying claims.
Claims incidence
New Zealand has had a record number of weather events over the last 5 years; more weather events means more claims. Climate Change is becoming a very real risk to insurers and as such, they’re having to review their pricing models to ensure that properties in coastal and other event-prone areas are being rated appropriately to ensure that insurers have the financial resources to continue to pay claims arising in these areas.
What we're doing
We’re reviewing every House policy as it comes due for renewal; this includes comparing cover and premium with alternative insurers, negotiating discounts where possible, and advocating strongly for our clients.
How you can help
Please check that your policy details are correct! Make sure that the m2 area noted is correct, review your Sum Insured, check the Property Occupancy is current and consider your current Policy Excess. Having these details checked and correct ensures we’re working to secure you quality coverage & a competitive premium on the right basis.
If you have any queries or you want to have a conversation about these increases and how they impact you, please reach out to your Broker who'll be happy to assist.
