Insurance when buying your first house
There’s a lot to juggle when you’re buying your first place – deposits, lawyers, moving trucks, the lot. Sorting out home insurance when buying your first house is another step, but it doesn’t have to be confusing.
That’s why we created the First Home Buyer Insurance Guide. It explains what house and contents insurance is all about, answers the questions first-home buyers ask most, and helps you avoid common mistakes.
Key takeaways
- When buying your first home, you should arrange insurance before settlement because most banks require proof of insurance before releasing mortgage funds.
- If buying at auction, you should check that the property is insurable before bidding and obtain a Letter of Intent to confirm you can obtain cover if you are successful.
- If making a conditional offer, you may need to provide your bank with proof of insurance before finance approval is confirmed.
- A Letter of Intent confirms that the property can be insured, while a Certificate of Insurance confirms that active cover will be in place from the selected start date.
- Your policy start date should match your settlement date, as this is when legal ownership transfers to you.
- initio cannot provide insurance cover before settlement, even if you have early possession of the property. Cover can only start from the settlement date.
- You can set up your policy with initio up to 30 days before settlement, so your documents are ready when needed.
You’ve got enough to think about. We’ll make insurance the easy part.
When do you need insurance?
One of the biggest surprises for first-home buyers is when insurance is actually required. Most banks won’t release your loan until they’ve seen confirmation of cover. You can’t leave it until after settlement.
Here’s how timing works:
- Auction: Check in advance that the property is insurable before bidding.
- Conditional offer: Your finance clause usually requires proof (Letter of Intent or Certificate of Insurance).
- Settlement day: Even with an unconditional offer, you’ll want cover active from the moment you take ownership. Learn more about when your cover needs to begin.
Sorting your insurance early gives you peace of mind and avoids last-minute stress.
Proof of cover: two simple options
Best when you’re still finalising the purchase or need something fast. Get a quote online, customise your cover, and download the Letter of Intent instantly to show your lender the property can be insured.
Once you’ve bought the home, complete your sign-up, pay your premium, and receive the Certificate of Insurance by email. This confirms your cover is active from settlement day. All you need is your new address – no phone calls, no delays.
What to look for in your policy
Insurance isn’t one-size-fits-all. Before you buy, think about:
- Sum insured: The rebuild cost of your home (not the market value). Include demolition, site clearance, and GST. Use our calculator to help you estimate the rebuild cost.
- Excess: What you’ll pay if you make a claim. Higher excess lowers premiums but increases out-of-pocket costs.
- What’s covered: Fire, flood, storm, burglary, accidental damage, and natural disasters.
- What’s not: Wear and tear, gradual damage, or maintenance issues.
And don’t forget contents cover – your furniture, electronics, and valuables add up quickly.
Mistakes first-home buyers often make
It’s easy to treat insurance like a box to tick, but the wrong choice can leave you out of pocket. Common mistakes include:
- Underinsuring: Cutting corners on your sum insured lowers premiums but leaves you short if disaster strikes.
- Guessing rebuild costs: Use a calculator or valuation instead of rough estimates. Learn more about calculating rebuild costs.
- Chasing the cheapest price: Low-cost policies often have gaps in cover or poor claims support. Use our online comparison tool to compare cover options between leading NZ insurance providers.
- Picking the wrong excess: Balance affordability with what you could realistically pay. Learn more about insurance excess
- Forgetting contents and car cover: Protecting your house is step one, but your belongings and car matter too. Access our contents calculator tool to work out the value of your belongings.
Why initio works for first-home buyers
You don’t just need cheap insurance – you need cover that works when it matters. That’s where initio comes in:
- Instant quotes and proof of cover online
- Thousands of verified 5-star reviews
- Transparent, fast claims process you can manage online
- Backed by IAG, New Zealand’s largest general insurer
- Policies designed for Kiwi homeowners and landlords
We built initio to take the hassle out of insurance. No hold music. No confusing forms. Smart cover made simple.
Ready to get started?
Read the full First Home Buyer Insurance Guide for step-by-step instructions, examples, and practical tips to help you get it right from the start.
Make insurance one less thing to stress about – so you can focus on enjoying your new home.
Ready to begin your journey with initio? Start with a quote
Frequently asked questions
When should I arrange house insurance when buying my first home?
You should arrange house insurance before settlement. Most banks require proof that your new home is insured before they release mortgage funds.
What is a Letter of Intent for house insurance?
A Letter of Intent confirms that the property can be insured. It is commonly used when you need to show a bank or other party that insurance should be available before your purchase is finalised.
How early can I arrange my house insurance before settlement?
With initio, you can arrange your policy up to 30 days before settlement and set the policy start date to match your settlement date.
Related articles
Written by Megan Fisher. Initio’s Head of Marketing
Megan has been with initio since 2022 and creates customer-focused content that helps New Zealand homeowners and landlords understand insurance in plain English. She works closely with initio’s claims, customer support, and development teams to make sure content is accurate, useful, and easy to follow. She has more than 20 years of experience in marketing and product strategy.
Want to dive deeper?
Watch our video where Guy, our Head of Partnerships, explains what insurance actually does, why banks care about confirmation of cover, and how to avoid common traps as a first-home buyer.