Insurance costs are rising fast: Can you still afford to have home insurance etc?

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556 posts

Ultimate Geek

#3148891 18-Oct-2023 15:59

MikeB4:

Maybe time for the government to start again a state backed insurance company

When the Government is paying out over 80% of the value of the house to uninsured in cyclones, why bother with insurance at all?

mattwnz

20147 posts

Uber Geek

#3148893 18-Oct-2023 16:02

Item:

Hah - I opened GZ this morning with the intent of sharing my annoyance with TradeMe insurance taking the piss with the car renewal I received this morning and I see it is already a hot topic.

They have kindly offered to renew at a $370 annual increase from last year - even though I have made no claims, have a $750 excess and they have reduced the agreed value from $75k to $58k vs 2022.

I am fortunate enough to be able to absorb this for now, but I feel for everyone currently being driven to the breadline through financial "Death-by-1000-cuts" and acknowledge that even those of us who are relatively comfortable are still only one run of bad luck away from destitution.

Life is a bloody rort these days, a superficial change of government will do nothing to fix it and I am not sure if things will ever get better without burning everything to the ground first.

Now off to see if I have to change providers again in order to get any kind of reasonable deal.

I understand they are a Tower reseller, and the quote interface is identical. So you could compare with other providers including Tower.

mattwnz

20147 posts

Uber Geek

#3148896 18-Oct-2023 16:06

Is isn't just insurance, but council rates hikes as well. Rates also pay for the councils insurance which has increased a lot. This will also increase inflation overall, because higher insurance means landlords have to pass this onto renters, as they wouldn't be able to absorb this price hikes. Yes it is time for a government run insurance like State used to be. But I think that is now highly unlikely under Nact, unless WP has some influence.

alasta

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#3148897 18-Oct-2023 16:06

I am on a body corporate committee representing a large townhouse complex. Our insurance broker has told me that escalating insurance costs are a global problem driven by global events, as well as our own domestic risks and events.

Within our complex there are large variations in annual increases across the various different homes, and these variations seem to come down to the vagaries of the insurance companies' algorithms. One interesting observation is that homes of lower value seem to be attracting lower increases due to the fact that the EQC coverage makes up a higher proportion of the value of the property, hence reducing the commercial insurer's risk exposure.

I wonder how banks are going to respond if mortgage holders start deciding that they can't afford insurance any more. Will they force mortgagee sales? If so, what financial risk will that create within the housing market and how would the Reserve Bank potentially react?

Interesting times.

mattwnz

20147 posts

Uber Geek

#3148902 18-Oct-2023 16:16

alasta:

I wonder how banks are going to respond if mortgage holders start deciding that they can't afford insurance any more. Will they force mortgagee sales? If so, what financial risk will that create within the housing market and how would the Reserve Bank potentially react?

Interesting times.

I wonder if they will build it into the mortgage repayments if that starts to happen, as they will want to protect their interests. Banks do often sell insurance themselves. But I do think that if people have purchased a property and it was known that that time that it is in a high risk flood area, or risks from rising sea levels, then they should be paying higher insurance. The problem is that many areas that are now considered higher risk, were only detected more recently after surveys took place, so many won't have been aware of the issues, and the area may never have flooded in the past. That risk however can be reduced by councils building things like stop banks to reduced flooding risk.

ANglEAUT

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#3148909 18-Oct-2023 16:31

mattwnz: It isn't just insurance, but council rates hikes as well. ...

& food as well.

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

richms

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#3148910 18-Oct-2023 16:46

How old does a vehicle have to be to get antique car insurance where its cheap but you get a limited number of k's per year? With the disuse that my fossil vehicles get and them all being 20+ years that might be a valid option.

Richard rich.ms

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Tinkerisk

4227 posts

Uber Geek

#3148914 18-Oct-2023 16:55

Bluntj:

MikeB4:

Maybe time for the government to start again a state backed insurance company

When the Government is paying out over 80% of the value of the house to uninsured in cyclones, why bother with insurance at all?

Great argument! And where does the money from the government come from again? The miraculous fish multiplication thing worked in the Bible, but I doubt it works with money. 😄

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antoniosk

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#3148924 18-Oct-2023 17:06

Bluntj:

MikeB4:

Maybe time for the government to start again a state backed insurance company

When the Government is paying out over 80% of the value of the house to uninsured in cyclones, why bother with insurance at all?

well, depending on which colour team is in power, you’ll get a different response, and a lot of it will be glacial. Look at the people in Hawkes bay still waiting for something, or the folks in chch who had nearly 10 years before they got an eventual settlement.

we only get one existence and one clock that’s constantly running down. 10 years and all the stress and hell that would create.

private insurance is equally poor when it wants to avoid payout. Sad reality is…. What’s the alternative? The state shall provide? What a joke.

________

Antoniosk

mudguard

2114 posts

Uber Geek

#3149940 18-Oct-2023 19:40

richms:

How old does a vehicle have to be to get antique car insurance where its cheap but you get a limited number of k's per year? With the disuse that my fossil vehicles get and them all being 20+ years that might be a valid option.

My four year old Corolla costs almost $2k PA (but that's 90% business use). I have a 92 Civic that's insured through Classic Cover, full insurance, 8000kms per year and it's $400PA

Tinkerisk

4227 posts

Uber Geek

#3149941 18-Oct-2023 19:47

My car is 120€/a 😊, the eScooter 24€/a, the bicycle 0€/a just plain mandatory insurance with no whistles and bells (I have to pay my own damage in case of an accident caused by me). [1€ ~ 1,7 NZ$]

The „just basic“ insurance has 2 advantages: a. Low insurance premiums, b. You always obey the traffic rules and you drive much more defensively, e.g. instead of 220km/h only 130km/h on the autobahn.

Insurance is a business of fear, which in some cases is well-founded, in others completely unfounded. You have to realistically assess your individual risk and ability yourself or pay high premiums.

Wheelbarrow01

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Chorus

#3149965 19-Oct-2023 00:11

richms:

How old does a vehicle have to be to get antique car insurance where its cheap but you get a limited number of k's per year? With the disuse that my fossil vehicles get and them all being 20+ years that might be a valid option.

I don't think it's necessarily about age although Star insurance considers anything 25 years or over to be a "classic". I have two older (but hardly antique) vehicles insured with Star Insurance as 'modern hobby' vehicles - this means they are not my daily driver but there is no specific limit on how many kms I can drive in them per year (and they didn't ask me to provide odometer readings anyway):

1992 HSV Senator - agreed value $32k - comprehensive premium is $313 per annum.

1988 Hilux Surf - agreed value $15k - comprehensive premium is $231 per annum.

My daily driver (if you could call it that) is a 2011 VW Touareg, insured for $31k with State and the premium for that is currently $996. Personally I think I am being shafted on that as I work from home so it literally sits in the driveway Monday to Friday, and even in the weekends my wife's car is the primary go-to as it's always parked behind the Touareg in the driveway.

frednz

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#3149982 19-Oct-2023 07:41

Here's a short extract from an article about how insurance costs could "increase massively" which predicts that properties worth $1 million on Wellington's Petone foreshore could reach $100,000 a year to insure in 20 years:

Picture a $1m house on the Petone foreshore, at the Lower Hutt end of Wellington harbour.

New sea level rise data showed the land was sinking, meaning in just 18 years the area would experience sea level rise sufficient to cause damaging once-in-a-century storms every year.

Climate Sigma climate economist and modeller Belinda Storey said flood insurance premiums for a house like that right now sat at about $1500 a year.

But she predicted that cost could start to double every two or three years.

"In 20 years' time that insurance subsidy, if the government was to step in and say 'we'll start covering this', that subsidy for that house would be $100,000 per year - and it will keep going up."

So, should you buy a property in Petone (and other risky places) given these sort of predictions? Petone is such a go-ahead and lively place, full of cafes etc. This has been a selling point in the past, but property values may start dropping if people take these future predictions seriously.

This raises another point, should everyone's insurance costs go up to cover the greater risk of insuring properties in places like Petone?

Aucklandjafa

395 posts

Ultimate Geek

#3149984 19-Oct-2023 07:46

My contents insurance has pretty much doubled - insane. House renews in Jan (not looking forward to that). Strangely enough, my fully comprehensive car insurance has dropped $30 for the year - super-odd. All with AMI too.

frednz

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#3149995 19-Oct-2023 08:30

Aucklandjafa: My contents insurance has pretty much doubled - insane. House renews in Jan (not looking forward to that). Strangely enough, my fully comprehensive car insurance has dropped $30 for the year - super-odd. All with AMI too.

That's interesting, have you made any claims on your contents policy recently? I'm not sure if this is correct, but if you've made a few claims, this might increase your "risk profile" and cause your premiums to increase.

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