Guest post: The Devil’s in the details – What to look for when taking out a NZ home insurance policy

As someone who’s been burgled multiple times, I know just how important having good insurance is – and if you’re a homeowner, it’s even more vital to get it right. Today’s guest post offers an overview of what’s available from NZ banks.

Just like home loans, when it comes to comparing bank home insurance policies it’s often said that the devil is in the details, and for good reason – whilst many bank policies are similar, differences (both big and small) do lurk in the densely written sea of fine print which many unwitting policy buyers fail to read, or in some cases even understand. The results can be both costly and frustrating – such as needing to have sewer pipes unblocked but discovering to your dismay that your policy does not cover it, as is the case with Kiwibank and Westpac home insurance.

The simple fact of the matter is that not all bank home policies are drafted equal, some offer benefits others do not and the payouts differ from bank to bank and policy to policy. This makes it imperative that home buyers know what to look for when taking out a home loan as well as a home insurance policy. Although all home insurance policies offered by the leading NZ banks cover the home, they differ in terms of their classification of just what ‘the home’ is. Especially when looking for insurance you always have to weigh competitors against each other.

This is of special importance to those who run an office from home. Some homeowners operating a business from their house are surprised to learn that their policies, such as the one offered by ANZ, fail to cover any part of the house which is used for income generation purposes. Should the policy holder seek coverage for this area of the house they will have to classify it as a special area – resulting in a bump up of their premium, of course. Those looking for coverage of their home office would be well advised to make sure their policy, like the one offered by BNZ, automatically covers any sudden and accidental loss or damage caused to the home office.

It’s also worth noting that all the major NZ banks limit their payouts to the insured amount; however they differ in the maximum they offer within that amount for retaining walls and recreational features. For example, both ASB and BNZ offer $20,000 on retaining walls and $40,000 on recreational features whereas ANZ provides up to $50,000 on retaining walls but makes no mention of recreational features. Basically, which policy a home owner or buyer decides to take out should depend on their foreseeable needs in the event of sudden and unexpected damage to any or all areas of their property. Thus, if buying a house with a spacious garden and a swimming pool, it’s best to opt for a policy that covers these recreational features without having to classify them as special and add thereby to the cost of your premium.

In most cases, buyers looking to take out a NZ home loan have to acquire insurance on their home as well. The problem is that most buyers are too preoccupied with the terms and conditions of their home loan that they forget to read through the fine print of their home insurance policy. By simply taking the precautionary steps to read through and evaluate the fine print of a home insurance policy, homeowners and buyers alike can better be assured of matching the right policy for their household insuring needs.

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