Over recent times New Zealand has suffered several natural disasters such as the Christchurch earthquakes, Cyclone Gabrielle which devastated parts of the North Island, and other weather-related events. New Zealand also sits on several fault lines so there is a risk of future earthquakes. In addition to this, there are more vehicles on our roads and accidents will happen from time to time.
This is where having House, Contents, and Vehicle insurance can help protect the things we love – as well as our finances.
While it might seem like an additional expense, having comprehensive insurance coverage can provide financial security and peace of mind.
House Insurance: Protecting Your Biggest Investment – Your Home.
If you have a mortgage, your home is likely to be your most significant asset and liability. House insurance protects this investment, ensuring you can continue to meet mortgage payments even if your home is damaged or destroyed.
For those with mortgages, insurance takes on an even greater significance. Most lenders require borrowers to maintain adequate house insurance. This is because the property serves as collateral or security for the loan. If the home is damaged or destroyed, the lender’s security is at risk.
Even if your home is severely damaged or destroyed, you’re still responsible for mortgage payments. Without insurance, you could find yourself in the devastating position of paying a mortgage on a home that no longer exists or is uninhabitable, while also needing to fund repairs or rebuilding.
Insurance ensures you can rebuild or repair without defaulting on your loan.
House insurance, including EQC (Earthquake Commission) cover, helps you rebuild or repair your home if disaster strikes. Rebuilding or repairing a home without insurance can be financially crippling. Insurance ensures you’re not left homeless or left in debt if the worst happens.
Contents Insurance: Safeguarding Your Possessions and Other People’s Property.
Even if you own your home outright, contents insurance is essential.
The cost of replacing all your personal belongings in case of theft, fire, or natural disaster can be substantial. Many policies include cover for temporary accommodation if your home becomes uninhabitable due to an insured event and personal liability cover, protecting you if you accidentally damage someone else’s property. This is important if you are a tenant, as you may be responsible for repairs or replacement to the property you are renting, as insurance companies could come to you to recover their costs.
Vehicle Insurance: Why You Need It.
Repairs or replacement of your vehicle can be expensive. Having vehicle insurance can help manage these costs.
Even if you have a low-value vehicle and don’t think insurance is worth it, if you were to cause an accident that damages another vehicle, you’re liable for the cost of repairs.
If you hit a high-value car, such as a luxury vehicle, these costs can be substantial. Without insurance, you’d need to pay from your own pocket. If you can’t afford to pay for the damages you’ve caused, the other party may take legal action against you. This could put your assets, including your home, at risk.
While comprehensive vehicle insurance (full insurance) offers the most protection, having at least third-party, fire and theft coverage is significantly better than having no insurance at all.
At a minimum, third-party insurance protects you from the cost of damage you might cause to other people’s property. It also covers you if your car is stolen or damaged by fire. Paying for damages to another vehicle on top of potential repairs to your own car can put a significant strain on your finances, especially if you’re also managing a mortgage.
Conclusion
For Kiwi homeowners, especially those with mortgages, having comprehensive house, contents, and vehicle insurance isn’t just sensible – it’s essential.
These policies protect your most valuable assets, provide financial security, and offer peace of mind in a country known for its unpredictable natural events.
While insurance premiums may seem like another “added expense”, the cost of not having insurance when you need it can be far greater.
As your home value increases and your mortgage balance decreases over time, or you make improvements, your insurance needs may change as well. Regular reviews ensure your coverage aligns with your current mortgage situation and home value.
We can refer you to a number of insurance providers that will be able to give you advice and a thorough understanding of what’s best for your situation, so feel free to reach out and we can put you in touch with them.
Applications for house, contents, or vehicle insurance (also known as fire & general insurance), are subject to an application being accepted by an insurer, and if a policy is issued, their terms and conditions being agreed to. Please note, we do not offer advice for fire & general insurance or associated products, but can refer you to a number of providers.
Refer to our website www.hbmi.co.nz for our Public Disclosure Document.
