House Insurance revamp: who are the best ones now?

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Batman

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#119356 29-May-2013 12:28

If you are up to date you'd know that nearly every insurer will/have stopped insuring full rebuild of your property, instead you will have to decide on an "agreed value" amount to insure your property for. If your property needs to be repaired or rebuilt in the unlikely event of a disaster or accident (eg fire) and your sum falls short, bad luck.

If you didn't know this already, well, aren't you in for a shock!

SO:

with that in mind, i suppose can I ask which insurance company people insure their property with? And how they rate it?

Is NZI or Tower any good? vs AMI which used to be good but are now under new ownership?

What about rental property?

cheers

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#827699 29-May-2013 12:53

I think you mean "AMI used to be cheap"

They weren't good - they couldn't meet the cost of their claims. They didn't have enough re-insurance and they didn't re-insure as much as others. It was only due to the pragmatic largesse of the tax payer that enabled them to be bailed out.

Arguably I'm with a "good" insurer" (State) but an hamstrung by the piss poor EQC and what really chews my balls is that AMI customers are getting sorted through Southern Response much faster than I am.

So my logical answer would be to go to the crappiest insurer you can find because the government wil see you right.

myndlyz

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#827703 29-May-2013 12:59

Im with BNZ, they are thru IAG i believe, my house has come up for renewal and yes its changed from a square metre policy to a sum insured. Naturally the premiums have increased by quite a bit too, contents increased but not that much.

Havent had any claims as yet so cant say if they are any good or not, but nothing has ever prompted me to change or look elsewhere.

vexxxboy

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#827739 29-May-2013 14:21

Im Switching from AMI To tower and if i do it by Friday i still get the old full replacement policy on the house based on Square metre for the next year and $150 of petrol vouchers for switching 3 polices to tower and it works out almost the same price im paying with AMI.

Common sense is not as common as you think.

savag3

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#827924 29-May-2013 18:23

I suggest people review the number of active cases against each insurer on the High Court earthquake list. Some insurance companies feature more often than others.

Batman

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#827934 29-May-2013 18:54

thanks for that.

hmmm it seems the only one offering full rebuild is tower who features a lot! maybe that's why they're the only ones who can afford to offer full rebuild instead of agreed value/sum insured?

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#827936 29-May-2013 18:56

not sure if iag is a good reflection I thought they are the largest insurer in chch - not too sure

Fred99

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#827940 29-May-2013 19:05

minimoke: I think you mean "AMI used to be cheap"

They weren't good - they couldn't meet the cost of their claims. They didn't have enough re-insurance and they didn't re-insure as much as others. It was only due to the pragmatic largesse of the tax payer that enabled them to be bailed out.

AMI were meeting government set prudential guidelines for the insurance industry, they also had a rating from AM Best of A+.
The problem was that nobody anticipated such an event as the Chch quakes (including and especially government who faced an even much more massive shortfall in reinsurance through EQC).
In the case of EQC, it's hardly some generous act by the taxpayer to make up the shortfall - they are required under the EQC Act to make up any shortfall from Govt coffers.
In the case of the rescue of AMI, government would be remiss if washing their hands of responsibility for failure of a company due to circumstances which should have been foreseen when setting those prudential guidelines.

Modelling was based on a M7.5 event in Wellington. The cost of that event has been vastly underestimated by EQC - and insurers. That's going to change - and we're all going to pay for it.

The sad part about the loss of AMI is that all profits from home insurance in NZ now head overseas.

The only insurance company I'd recommend is Lumley. They seem to have been the best in meeting their obligations to their clients in Christchurch. Many have been appalling, Tower, AA/SIS, State.

As well as the shift to "agreed value", most (all?) insurers have increased excess for "out of scope" (stuff not covered by EQC) natural disaster damage - now typically $5k excess for driveways, fences etc.
The excess for "in-scope" damage is covered by EQC will almost certainly change. The operation of EQC is being reviewed and most likely there will be a large excess from EQC. In the event of another Chch type quake, then this might be a good thing. EQC have been overwhelmed with claims for relatively minor stuff (cracked plaster etc) that would inevitably be fixed at low cost when painting a room as part of routine maintenance - in the meantime, living with superficial cosmetic damage is hardly even inconvenient. In the meantime, people with serious structural damage are still waiting...
EQC have also been paying out large sums of $$$ for "precious" home contents, collections of chinaware, crystal, etc etc. This is nuts (IMO) - as surely the purpose of a government isn't to insure luxury items, but to ensure that the basics can be reinstated so that people can rebuild and get on with their lives following such events.
I expect these matters will be addressed with the review of EQC's operations in NZ.
So as well as higher premiums, higher excesses, and agreed value, if you want some precious contents covered for natural disaster, you'll need to negotiate separate cover through your private insurer.
Excesses for EQ cover in Califormia run at about 20% of home value - and it costs a fortune to have this reduced. EQ risk for NZ is about the same as California. EQ risk for Chch is about the same as for Tauranga - between Chch and Tauranga, risk is much higher.

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Batman

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#827960 29-May-2013 19:44

I had a friend in the port hills, house bought for 700k, after quake had it surveyed at 800k to rebuild + contents, got a 800k payout and kept the land ... (my guess is about 30k for demolition)

so there you go ... the result? everyone else now pays more ...

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#827961 29-May-2013 19:45

is NZI bad? or ok?

lapimate

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#827992 29-May-2013 20:45

Fred99: ... The only insurance company I'd recommend is Lumley. They seem to have been the best in meeting their obligations to their clients in Christchurch. Many have been appalling, Tower, AA/SIS, State. ...

See insurancewatch.org.nz for some analysis.

Byrned

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#828014 29-May-2013 21:14

Fred99:
The only insurance company I'd recommend is Lumley. They seem to have been the best in meeting their obligations to their clients in Christchurch. Many have been appalling, Tower, AA/SIS, State.

Funnily enough I was talking to someone from EQC recently and they said after everything they've seen they'd only do their insurance through Lumley.

Fred99

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#828048 29-May-2013 22:35

lapimate:
Fred99: ... The only insurance company I'd recommend is Lumley. They seem to have been the best in meeting their obligations to their clients in Christchurch. Many have been appalling, Tower, AA/SIS, State. ...

See insurancewatch.org.nz for some analysis.

This:

Fred99

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#828051 29-May-2013 22:45

joker97: I had a friend in the port hills, house bought for 700k, after quake had it surveyed at 800k to rebuild + contents, got a 800k payout and kept the land ... (my guess is about 30k for demolition)

so there you go ... the result? everyone else now pays more ...

Bottom line on this is that regardless of EQ, most of the Port Hills is "Green Zone" with no requirements for special foundation design as applies for land with "TC" ratings. However foundations for homes on sloping sections require engineering design and because of the nature of the site you're unlikely to be able to plonk an ordinary design and build box as found on most NZ new housing estates - costing $2k or less per M2.
Build costs were already ~ $3k/m2 - before post EQ "demand surge inflation".

Oblivian

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#828060 29-May-2013 23:08

IAG, State, NZI, AMI, Business partnership = IAG

But unless they can all sustain current policies (some independants are keeping their old ones) you will likely see them all shift to this model as polices are renewed over the next 3 years. Like car stated value, sometimes they win. Sometimes they lose.

House market fluctuations will earn them cash for those not wary enough to keep an eye on their own GV and adjust accordingly. This is what is likely to catch young buyers and elderly out. More so screwing over anyone that does get regular damage (like chc has potential for now, or most the south island within the next 50yrs when the alpine fault goes) as the new criteria make for massive excess

Just moved out to new place, along with it jumped from $500 a year to $1400 (house value estimate is now 100k higher), excl contents and extermal concrete/land excess of nearly 2k.

vexxxboy

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#828093 30-May-2013 07:21

dont let the GV guide you ,my house has a GV of 280,000 (Rotorua) but after trying those calculators they gave me a average of 410,000 to rebuild everything.

Common sense is not as common as you think.

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