Getting the right level of insurance cover is really important, especially when it comes to protecting your biggest asset, your house. 

Insuring your house for a sum that’s too low has become a worrying trend in NZ. So what’s the best way to ensure it’s completely covered?

Ando Insurance Group says the answer lies in knowing what to include when specifying the size of your house in square meters, and what to include when calculating the sum insured if a natural disaster strikes. By getting it right, you only pay for the cover you actually need.

What’s the difference between sq meters (SQM) and natural disaster sum insured?  Let’s delve a bit more into these:

• Accurately specifying the size of your house                                                                                                                                                                                                                                                                                                                                        If your house is destroyed by a sudden and accidental event like a fire or flood, it will be rebuilt up to the square meters listed on your schedule – regardless of cost. It’s important therefore that you have the correct square meterage (SQM) for your house listed on your schedule so you are not underinsured.                                                                                                                                                                                 
• Accurately calculating the natural disaster sum insured value                                                                                                                                                                                                                                                                                                           If your house is damaged or destroyed by a natural disaster, it will be replaced up to the sum insured amount you’ve specified on your schedule. This will include any payment from EQC. It’s important to make sure that your sum insured is enough to cover all the costs of rebuilding your home, as this is the maximum you will be paid.                                                                                                                                                                                                              Too many times, the natural disaster sum insured is too low. Re-build costs can be affected by things like whether your property is located remotely, if the site it’s on is difficult to access, or if there is a swimming pool.   

You can ask a professional to help you work out your sum insured, or you can do it yourself with the independent online Cordell Sum Sure Calculator. Bear in mind though that calculators generally can’t take into account special features you may have on your house or property, if it’s built on a steep slope and if your home is particularly large or expensive. That’s where the advice of an expert will pay for itself. 

It's a good idea to review the sum insured each year, or when making renovations to your home, to make sure it’s accurate. Remember too that you can amend your sum insured at any time. 

Want to know more? Check out these insights from quantity surveyor Andy Thomson of Construction Cost Consultants.
 

For a confidential conversation about your insurance program, contact one of our members today.

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.