Why has my premium changed?

Wondering why your home insurance cost looks different? You’re not alone. Your insurance cost can shift for a few reasons. Let’s break it down:


What makes up your insurance cost?

Your home insurance cost is made up of three things:

  1. The policy charge: This is the primary part of your insurance. These are some of the things that have a direct impact on your policy charge:  
    • Your sum insured
    • Insurer premium rates
    • Global insurance costs (re-insurance)
    • Construction materials & labour costs
    • Frequency and severity of past and anticipated weather events
  2. Fire & Emergency NZ Levy: A Government charge that funds emergency response and fire fighting services
  3. Earthquake Commission (EQC) Levy: This is a fee for insurance cover that the Government provides. It helps protect your home and land from natural disasters like landslips.  Learn more about EQC cover


So right now, what’s changed and how does it affect my insurance costs?

  • Rebuild value of your home: Each year, we might raise the amount your home is insured for. We do this to match the increasing cost of building a house, and we call it indexation. If the insured value goes up, your policy cost will also go up. Remember, you’re the one who decides the final insured value of your home. You can always change or undo any updates we make. Any changes to this value will change the cost of your insurance.  Learn more about changes to rebuild values.
  • Premium rate changes: Each year the cost of your policy might change. This happens because of the money needed to provide the insurance. Insurance providers, like us, look at the number of claims made and the chances of things like storms happening in the future. We also have other costs, like paying bigger insurers, to back us up. Sometimes, if a lot of people make claims, for example, after bad weather, the cost for everyone can go up, even if you didn’t make a claim. The money you pay helps create a fund that covers these claims. So if there are more claims, the cost could go up for everyone.

At your last renewal anniversary the following also impact your insurance costs.  Levies (either EEC or FENZ) normally increase every 3-4 years

  • Increased government fees: From October 2022, the EQC fee changed. If you pay annually, it will go up to $552 per year (an increase of $207 per year). If you pay each month, it’s $46 per month (an increase of $17.25 per month. This change applies to the first anniversary of your policy after 1 October 2022, with this change applied to all policies by 30 September 2023. 

A further explanation on why premium rates are increasing

  • Earthquake risks: New Zealand is earthquake-prone, it is in the ‘ring of fire’ and is considered one of the highest quake risk countries in the world.   This affects premium rates and re-insurers (the insurers of the insurers) charge more.  
  • Increases in building and labour costs: If it costs more to repair homes, the insurance cost goes up too.
  • Global insurance costs: It’s not just disasters in New Zealand that affect our premium rates.  When something happens on the other side of the world it impacts the insurers that provide cover to our insurer. 
  • More weather events: Big storms and floods mean more people need help from insurance, pushing up the cost.  The quantity and severity have been steadily increasing over the last few years but 2023 has been off the chart.  To ensure you have the latest updates on weather events, we’ll regularly update our blog with a link to the IAG Wild Weather Tracker report.

It’s worth noting that the above figures are across all New Zealand insurers and were calculated in August 2023, these numbers will be even higher now.


Will I always be notified of changes?

Yes, you will. If there’s a change to your yearly or monthly insurance cost, we’ll let you know a month in advance.  Generally speaking your insurance cost will change each year.   

Remember you can also check your cover and make instant changes to things like excess and sum insured from your online dashboard.

We aim to keep you in the loop so there are no surprises.


Useful Links

How are house insurance premiums calculated?

Am I covered for natural disasters?

Why does my rebuild value change?

Top 4 mistakes people make when insuring their house