Holiday Home vs. Own-Home Insurance: What New Zealand homeowners need to know
Owning multiple properties can sometimes make insurance decisions tricky, especially for New Zealand homeowners who use their homes differently throughout the week. For example, you might have one home you stay in during the weekdays and another you visit mostly on weekends.
Understanding the right insurance policy for each property is crucial to ensure you’re fully covered.
Key things you’ll learn in this article
- The right policy depends on how you use the property, not simply whether you own more than one home.
- Own Home insurance is designed for the home you live in as your primary residence.
- Holiday Home insurance is designed for homes that are regularly unoccupied or used for holidays.
- If you occasionally rent out your holiday home to short-term guests, there are cover options available for this.
- Vacancy conditions differ between Own Home and Holiday Home policies, so it’s important to choose the correct policy type.
- Personal belongings are generally insured under the contents cover for your primary residence, while holiday home contents cover is intended for items that remain at the holiday home.
The main difference between holiday home insurance and own home insurance lies in the occupancy and associated risks. Own Home insurance is for your primary residence where you would reside the majority of the home, not generally suitable if you leave it vacant for periods of 60 consecutive days or more. Holiday homes are not primary residences and are often empty for reasonable periods, increasing risks such as break-ins. Therefore, holiday home insurance has specific conditions and coverage tailored to these unique risks. If you aren’t using your holiday home all year round, you might rent it out between stays.
The following is a list of cover specific to each type of policy to help you determine which is the best policy for your property:
Holiday home insurance specific cover:
- Optional – Guests: Cover for damage, theft, and loss of rent if you host guests.
- Fixed contents: $20,000 standard cover for fixed contents at the home, with options to increase. This covers furniture that stays in your home permanently (not personal belongings). Cover is limited to the property address.
- Blocked pipes: Up to $1,000 to unblock an underground pipe, with no excess.
- Keys and locks: Up to $1,000 for replacing keys and associated locks, with no excess.
- Legal liability: $2 million legal liability costs if an accident damages other property or people.
- Optional – Loss of rent: Up to 12 months or $20,000 following damage to your house.
Own home insurance specific cover:
- Personal contents (available as an add-on to any Own Home policy): Replace or repair lost or damaged belongings, majority of items are insured on a new-for-old basis. Includes cover for contents including personal effects whilst at the property and temporarily removed anywhere in New Zealand.
- Temporary accommodation: $20,000 of alternative accommodation if your damaged house can’t be lived in.
- Reduced glass breakage excess: Reduced $250 excess for glass breakage claims.
What if you split your time equally between two homes?
If you divide your time equally between two homes, each property may require different insurance considerations. The home you use during the weekdays might need a standard home insurance policy, while the one you visit on weekends could be classified as a holiday home, or potentially you may need two Own Home (owner occupied) policies. It’s crucial to assess the specific usage patterns of each property to ensure you have the appropriate coverage. This should also take what belongings you use the majority of the time at each property into consideration.
Holiday home or rental?
Provided you use the home as your holiday home we can also offer the option of including short-term rental cover for you. If this describes your situation, select ‘Holiday Home – sometimes rented’ from the dropdown menu, and initio’s clever software will do the rest. If you’re not sure which cover is best for you – we’re here to help.
Which policy do I need?
| If… | You’ll usually need |
|---|---|
| You live in the property most of the time | Own Home insurance |
| You mainly use it for holidays or weekends | Holiday Home insurance |
| You use it as a holiday home and occasionally rent it to guests | Holiday Home insurance with the appropriate guest option |
| You don’t use the property yourself and it’s only used as guest accommodation | Commercial accommodation insurance (not a domestic holiday home policy) |
What special terms apply (regarding vacancy) on each policy?
Holiday Homes:
If no one has been living or holidaying at the home for a period of more than 60 consecutive days, and the home is recorded as a holiday home, expectations are that the following criteria can be met:
- the home is inspected inside and outside by you or a nominated person at least every 60 days, and
- the home and its grounds are adequately maintained, mail is cleared regularly and
- the water supply is turned off and
- all doors are locked and windows secured
If you are unable to meet those conditions, cover will continue with a higher standard excess of $5,000 applying to any claim. If however, a loss results from a break-in or attempted break-in at the home while it is fitted with an active, professionally-installed alarm or security system, then an excess of $1,000 applies.
Own Homes (primary residence):
If no one has been living at the home for a period of more than 60 consecutive days, we will only pay for loss that is:
- caused by fire, explosion or lightning, or
- covered under the ‘Natural disaster’ automatic additional benefit.
These terms can be reviewed upon request for special circumstances.
What if I only use the house for guests?
Under our cover, you need to use the house at least occasionally yourself over the course of a typical year. If you;
- don’t use the house yourself as your holiday home and as such also
- don’t keep personal items at the home, and
- it is only rented to short-term guests,
it is considered a commercial operation, similar to a motel. Our cover is domestic-based house insurance, and cannot be used if the above requirements are not met.
Are my personal contents covered under a holiday home policy?
Your personal contents items, like phones, jewellery, and laptops, won’t be covered under your holiday home cover as they should be protected by your contents cover at your main home. Belongings that remain at your holiday home, like furniture, TVs, and glassware, are covered. You can only insure your personal contents with initio as an add-on to an owner-occupied home you also insure with us.
What else can you do to ensure you choose the best insurance provider for your needs?
When researching and comparing insurance providers, it’s essential to evaluate them based on their reputation, customer satisfaction, and claims processing efficiency. Reading customer reviews and testimonials can provide valuable insights into real-world experiences with different insurers. Additionally, carefully reviewing policy details, such as coverage limits, exclusions, excess amounts, and additional features, is crucial. Don’t hesitate to ask questions or seek clarification on any confusing terms or conditions.
Frequently asked questions
Which property should I insure as my own home?
Your Own Home policy should insure the property where you primarily live. If you own another property that’s mainly used for holidays or is regularly unoccupied, it will generally require Holiday Home insurance.
What if I spend equal time between two homes?
If you genuinely divide your time between two properties, the most suitable insurance will depend on how each home is used and where your personal belongings are primarily kept. If you’re unsure, contact us and we’ll help determine the right cover.
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Written by Megan Fisher, Head of Marketing at initio.
Megan has been with initio since 2022 and has over 20 years’ experience in marketing and product strategy. She works closely with initio’s claims and customer experience teams, giving her a first-hand view of how insurance works when customers need it most.