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Hosting short-term guests introduces unique risks. Most insurance companies are cautious about rented holiday homes so before letting out your home or listing your property on platforms like Airbnb or Bachcare, it’s important that you confirm your policy covers holiday bookings.

Effects on insurance costs

If you host paying guests, and you tell your insurer, they will likely adjust your coverage. Be sure to inform your insurer about your hosting activities and understand the implications for your policy. Many insurers, including initio, may increase premiums or excesses due to the additional guest-related risk. Some insurers may exclude coverage for guests entirely, leaving you at risk of being uninsured. It’s best to review your policy or contact your insurer if you’re unsure.  Make sure your insurer is aware that you rent out your holiday home.

What qualifies as a holiday home, for insurance purposes?

To qualify as a holiday home, the owner must;

• Use the property themselves as a holiday home, and;
• Have the right to occupy the property at will, and;
• Store personal belongings at the home.   

A holiday home can be used by:

• The owner, at any time.
• Friends and family.
• Tenants on a periodic basis, including short-term paying guests (stays with durations of less than 90 days).  

These criteria ensure the property remains under your control and qualifies as a holiday home with your insurance provider and meets the requirements for cover provided by the Natural Hazards Commission (NHC, previously EQC).  

How property management can affect your insurance

Using a property management company under a full management contract can impact your insurance. If the property manager has full control, you may lose the right to occupy the property, which can disqualify it from being considered a holiday home, and makes it ineligible for Natural Hazards Commission (NHC) coverage.  You must check your agreement with your property management provider as it may mean that you have assigned control cover to the manager and you no longer have the ability to occupy it when you wish.  

An insurer cannot provide domestic house insurance cover for a holiday home that does not meet the conditions of cover for the NHC. 

Understanding NHC cover: The Natural Hazards Commission (NHC) provides special insurance protection for the home against natural disasters like earthquakes and floods, and unlike your house insurance policy, it also extends to cover land damage.  To qualify, your property must meet specific criteria, including being under your control as a holiday home. For detailed information, refer to the NHC guidelines.

What if your property does not qualify as a holiday home under the NHC legislation?

If your home does not meet the NHC definition of a holiday home, to obtain cover you will likely need a commercial property insurance provider to structure insurance that covers the building, loss of income and liability risk.  

Does landlord insurance cover short-term rentals like Airbnb?

No, our landlord insurance is designed for standard long-term residential tenancies only. It doesn’t cover properties used for short-term rental activity such as Airbnb or Bookabach.

If you rent out your own home (where you live) occasionally on Airbnb, you may be eligible for cover under our Own Home, Sometimes Rented policy. Similarly, if you have a family bach or holiday home that you occasionally let to paying guests, it may be suitable for our Holiday Home insurance – sometimes rented – just make sure to select the option for short-stay rentals when quoting.

Short-term rental properties that operate like a business typically require commercial insurance, which isn’t available through initio. Learn more about the things we don’t cover at initio.

Doesn’t Airbnb’s ‘Host Guarantee’ cover me?

If you manage your property using Airbnb, you’re likely familiar with their Host Guarantee.

It’s important to understand that this guarantee isn’t a substitute for proper insurance. The Host Guarantee comes with limitations and might not cover everything you anticipate. It’s not equivalent to regular insurance and some hosts have discovered it doesn’t provide comparable protection. To ensure your property is fully covered against any damages or issues, having your own insurance policy is essential.

Airbnb’s Host Guarantee is not a traditional insurance policy but a conditional promise. It’s not regulated like insurance. Key requirements include:

• Report damage and file a claim within 14 days.
• Provide proof of ownership and, in some cases, a certified police report.

House Guarantee conditions can include:

• Only covers damage during the booking period.
• Coverage is limited to listed areas in your profile.
• Exclusions include damage from excessive utility use, animals, or pets.
• Rent loss cover only applies to confirmed bookings cancelled due to damage.

Given these limitations, Airbnb themselves recommends having a specialist insurance policy in addition to the Host Guarantee.

Everything’s in order, how do I get the right cover?

If you manage your holiday home yourself and meet the necessary NHC criteria, initio offers specialised cover for your holiday home  that is also used for short-term rentals. As the first in New Zealand to provide a house insurance policy specifically designed for holiday homes, Initio offers a hybrid house, contents, and guest insurance policy tailored for short-term rentals, without the strict conditions of a Host Guarantee.

Initio’s holiday home (with the additional short stay option) policy covers:

• The home itself for damage from things like flood, fire and storm (whether rented or not) 
• Accidental damage to the home by guests.
• Intentional damage by guests, up to $25,000 (e.g., if guests decide to damage walls deliberately) .
• Loss of rent for confirmed bookings cancelled due to the home becoming uninhabitable following insured damage, and also for loss of rent from unconfirmed bookings based on seasonal, area or your previous year’s use data) 
• Meth contamination from manufacturing, ie. contamination damage caused by an accidental incident in connection with the manufacture, distribution or storage (but only where the storage is in connection with supply or distribution) of methamphetamine at the home.
• Your legal liability to your guests for accidental damage and bodily injury.

These are the sort of protections you need when renting your home out to short-term guests.

Key takeaways

• Check your insurance: Ensure your policy covers holiday rentals before using platforms like Airbnb.
• Higher costs: Be prepared for higher premiums or excesses if your insurance covers guests.
• Host guarantee limits: Airbnb’s Host Guarantee has strict rules and limited coverage.
• Property Management impact: A property manager’s control might disqualify your home from holiday home insurance, check your agreement with the property manager and that you still comply with the NHC definition of a holiday home.
• Holiday Home rules: You must retain occupancy rights and keep belongings there to maintain holiday home status.
• Get the right insurance: Choose insurance designed for short-term rentals for better protection.
• Comprehensive coverage: Seek policies that cover guest damage, lost rent, meth contamination, and liability.

By managing your property with these factors in mind, you can better protect your holiday home and maintain your insurance coverage.

Holiday Home Insurance
Holiday Home vs Own Home

Related articles

• How to claim for intentional vandalism by tenants
• Should I get a property manager?
• Second dwelling on your property that you rent out?
• Help when your quote isn’t ‘straightforward’
• Should you rely on the Airbnb host guarantee?

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.

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.

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: 

1. caused by fire, explosion or lightning, or 
2. 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.  

Key takeaways

1. Tailored insurance coverage: Ensure each property has the appropriate insurance policy based on its usage, whether it’s a primary residence or a holiday home.
2. Personal belongings: Secure and appropriately insure personal belongings at both properties, ensuring valuables are covered and managed efficiently.
3. Maintenance and security: Maintain regular upkeep and robust security measures for both homes to prevent risks associated with extended vacancies.
4. Be aware of policy restrictions/conditions relating to how long a home is vacant for.
5. Thoroughly research and compare to make an informed decision.

USEFUL LINKS

• Holiday home insurance basics
• Holiday home insurance options
• Can I insure my house that’s rented out to guests?

Such as a bedroom or a self-contained unit/area? 

If you have a part of your property that you sometimes rent out short-term whilst you are not using it yourself, renting out part of your home means you need the right insurance to protect your entire property, rental income, and liability to any guests.

What counts as short-term renting, for insurance?

Short-term renting is lets of up to 90 days per guest stay. This could be via platforms like Airbnb or other short-term rental arrangements. When the space isn’t being rented, you or your friends and family use it. If a guest books in for a stay longer than 90 days, it is classed as long term and the property should then be insured under our Landlord Insurance product.

Does this match your situation?

• The area (unit/bedroom) is used for short-term lets between your own use.
• This could be an occasional Airbnb, but;
  • You must use the area yourself (or friends and family do) between paying guests

What insurance do you need?

For this setup, you’ll only need one insurance policy that covers your home and the short-term rental use. This is called an own home, partially rented policy, and it provides cover for both your personal use and rental activities.

Own Home, Partially Rented insurance

What does this policy cover?

Having the right policy means you’re covered for:

• Your home – Protection for your home including the area sometimes let.
• Short-term rental risks – Cover for things like accidental damage caused by guests, loss of rents and your liability to guests 
• Loss of rent – If a guest cancels or you’re unable to rent the space due to an insured event, you’ll be covered for lost income.

Get covered today

With initio, you can get a quick quote and buy insurance online in minutes, making it easy to ensure your property is fully protected. Getting a quote and buying insurance online with us is easy, but our cover is anything but basic. We offer comprehensive protection to ensure you’re fully covered.

Own Home, Partially Rented insurance

Why is this policy important?

Standard home insurance might not cover short-term renting, leaving you exposed to potential financial risks. A policy designed for partial rental use ensures you’re protected, whether you’re welcoming guests or enjoying the space yourself.

Need help? If you’re unsure about what policies are right for your situation, contact us to make sure you’re fully protected.

Get covered today with initio – Quick quotes, easy online cover.

Not quite what you’re looking for? Maybe some of these other scenarios suit you better:

• Do you have a second dwelling on your property that you rent out?
• Renting out a second dwelling solely for short-term stays
• Insurance for a non-rented second home on your property
• Second dwelling on your property that your family lives in
• Renting out two dwellings on your property

If you’re lucky enough to own a holiday home, you’ll want to make sure you’ve got the best insurance protection, especially considering you’ll not always be there in person to look after it. Whether you keep it for personal use or decide to rent it out to short term guests – we’ve got you covered.

Standard house insurance requires someone to be living at the home for more than 60 consecutive days. If it’s vacant for longer than this, it’s considered a holiday home. Because a holiday home isn’t your primary residence there are more risks involved, for example; the property may be empty for long periods of time, increasing its chances of break-ins. 

What are my obligations?

We expect holiday houses to be empty more often, so our conditions are a little more lenient, but we do require:

• You or your family stay at the holiday house at least once a year
• The house is inspected (inside and outside) by you or a nominated person at least every 60 days 
• The home and its grounds are maintained 
• Mail is cleared regularly 
• Water supply is turned off 
• All doors and windows are secured when the home is vacant.

If you can’t meet these conditions, then a standard $5,000 excess will apply to your policy. Alternatively, if it’s fitted with a professional alarm* this will reduce to $1,000 when you claim for a break-in or burglary.

* Systems which include surveillance cameras only do not meet this criteria – the system needs the ability to provide an external alert (audible or direct to a monitoring company)

How do I get holiday home cover?

It’s as simple as selecting holiday home as the property type when you generate your instant quote. Alternatively, if you are changing your current home into a holiday home, all you need to do is change your cover in the property type drop down menu. The monthly costs will automatically update and will take effect as soon as you confirm the change online. 

Holiday home or rental insurance?

The main difference between holiday homes and year round short term rentals is how often they are rented out. We have multiple options available depending on how frequently you rent your house out – just select the right option in the dropdown menu and initio’s clever software will do the rest. If you’re not sure which is the best cover for you, get in touch anytime. We’re here to help.

At initio, we offer comprehensive protection for your bach or holiday home, with flexible cover if you also rent to guests. Learn more: https://initio.co.nz/holiday-home-insurance/

This guide is intended to be a quick reference to vacant houses. We recommend reading the full policy wording for the full details of your holiday home coverage.

Useful articles:

• Own home or holiday home insurance – which is the right option for you?
• Holiday Home insurance
• Should you reply on the Airbnb host guarantee?

As a homeowner in New Zealand, you may have noticed fluctuations in your house insurance premiums over the years. While factors such as the rebuild cost of your home and the frequency of local weather events play significant roles, there’s another crucial element influencing your home insurance pricing: the global pool of insurance funds.

To put this into context, consider your personal insurance excess, which might be $650 for your house. In comparison, IAG has a $500 million excess for covering multiple homes in New Zealand in the event of a disaster. Similarly, while your house might be insured up to $1 million, IAG’s reinsurance limit is $10 billion. Although this is a simplification, it helps explain how reinsurance works.

The key takeaway here is that initio and IAG ensure you are well-covered. For more details, you can read the official article from IAG here.

New Zealand: A high-risk country with a small pool

New Zealand is one of the highest earthquake-risk countries in the world, situated within the volatile “Ring of Fire.” This inherent risk, combined with our relatively small population, means we draw from a comparatively smaller pool of insurance funds than larger nations. Consequently, our home insurance market heavily relies on global reinsurance companies to provide additional coverage and spread the risk.

New Zealand’s high exposure to natural disasters like earthquakes, floods, and cyclones makes it one of the riskiest countries for insurers. This, coupled with our small population and insurance market, underscores the importance of attracting global reinsurers to provide essential coverage.

For reinsurers to support the New Zealand market, it must be a worthwhile proposition. They carefully assess the risk-reward balance, considering factors such as the frequency and severity of past events, the potential for future catastrophes, and the insurance penetration rates in the country. If the risks outweigh the potential returns, reinsurers may limit their exposure or demand higher premiums, ultimately impacting the cost of home and contents insurance for New Zealanders.

What is a reinsurer?

A reinsurer is essentially an insurance company for insurance providers. When an insurance provider issues policies to customers, it takes on the financial risk associated with potential claims. To manage and mitigate this risk, the insurance provider may seek additional coverage from a reinsurer.

Here’s how it works:

1. Risk transfer: The insurance provider transfers part of its risk to the reinsurer. This process is known as “reinsurance.” By doing this, the insurer reduces its exposure to large or unexpected claims.
2. Premium payment: In exchange for taking on this risk, the reinsurer charges the insurance provider a premium. This premium is typically lower than the total premiums collected from policyholders, allowing the insurer to maintain profitability while securing additional risk protection.
3. Financial stability: Reinsurers help insurance providers maintain financial stability, especially in the face of large-scale disasters. For example, if a major earthquake occurs, the financial burden of the claims is shared between the insurer and the reinsurer, ensuring that the insurer can meet its obligations to policyholders.
4. Global risk distribution: Reinsurers operate globally, spreading risk across different regions and types of insurance. This global reach allows them to balance their portfolios and better manage the financial impact of claims from catastrophic events.

The importance of reinsurers

Reinsurers play a crucial role in the insurance industry by providing a safety net for insurance providers. This enables insurers to offer coverage to high-risk areas, such as New Zealand, which is prone to natural disasters like earthquakes, floods, and cyclones. Without reinsurance, insurers might be unable to cover such risks or would need to charge prohibitively high premiums.

Reinsurers enhance the capacity and resilience of the insurance market, ensuring that policyholders receive the protection they need, even in the event of significant and unexpected claims.

Global events and local insurance impacts

While major weather events or natural disasters overseas may not directly impact New Zealand, they can still influence home and contents insurance pricing locally. For example, when hurricanes, earthquakes, or wildfires strike other regions, reinsurers must divert funds to cover those losses. This depletion of the global insurance pool can lead to higher reinsurance rates, which local insurers must then pass on to their customers through increased home insurance premiums.

During hurricane seasons in the United States, insurance companies often raise their premiums due to the increased risk. This increase is subsequently passed on to reinsurers, making the US market more attractive to them compared to New Zealand. Reinsurers get a better return on their investment in the US market due to higher premiums and a larger risk pool. It’s also important to note that the IAG program covers both Australia and New Zealand, which makes it relatively smaller compared to the US market.

It’s not just the overseas events that can impact your house insurance pricing. Local factors can also have significant consequences. The devastating floods and cyclones of 2023 led to substantial claims and higher reinsurance costs for local home insurance providers.

The impact of regulation on pricing

New Zealand’s prudential regulation, particularly since the 2020 review by the Reserve Bank, has significantly impacted the cost of house insurance for homeowners. Most insurers globally have to hold sufficient reinsurance or capital reserves to cover the risk of a 1-in-200 year catastrophe event. However, New Zealand insurers must hold sufficient reinsurance or capital reserves for a 1-in-1000 year catastrophe event. This stringent requirement drives up the cost of reinsurance, which, in turn, increases the cost of insurance for homeowners.

Balancing risk and affordability

Insurers and reinsurers are constantly reassessing their risk appetites, pricing, and capacity in response to global and local events. While this process aims to ensure the sustainability of the home insurance industry, it can result in higher premiums for homeowners. However, it’s a necessary measure to maintain the availability of home insurance coverage and spread the risk equitably across the global pool.

Enhancing New Zealand’s reinsurance market

To make our market attractive to global reinsurers, it’s essential to maintain a robust and well-regulated insurance industry with adequate pricing and risk management practices. Initiatives like the new disaster response model between insurers and the Earthquake Commission (EQC) aim to improve efficiency and customer experience, potentially enhancing New Zealand’s reputation in the global reinsurance market.

By demonstrating our commitment to responsible risk management and ensuring a fair return for reinsurers, we can continue to secure the necessary backing to protect New Zealand homeowners against the risks we face in our hazard-prone environment.

Making informed decisions 

As a homeowner in New Zealand, understanding the interconnected nature of the global insurance market can provide valuable insights into the factors influencing your home and contents insurance costs. By staying informed and working closely with your home insurance provider, you can make well-informed decisions to ensure you have adequate protection against the risks we face in our beautiful but hazard-prone country.

When choosing house insurance in New Zealand, it’s essential to know that initio is backed by industry giant IAG. This partnership ensures our financial stability and capability to pay claims, providing you with peace of mind. We understand that the most important aspect for our customers is knowing that we have the financial strength to support them in times of need.

By partnering with a financially robust provider like initio, you can rest assured that your most valuable asset is protected, even in the face of unexpected events.

Useful links

• Why has my premium changed?
• How are house insurance premiums calculated?
• Am I covered for natural disasters?
• IAG confirms reinsurance protection

At initio, we’re all about providing clear and simple insurance solutions that fit your needs. However, there are a few types of insurance we don’t handle. Here’s a quick rundown of what we don’t currently cover, so you know exactly where we stand.

Stand-alone contents 

We understand that protecting your belongings is crucial. However, initio currently does not offer stand-alone contents insurance. Contents insurance is only available as an add-on to a home insurance policy for the same address as the insured property. If you are renting and only need to insure your contents, initio does not have an option for you at this time.  If you would like a quote for contents cover for your existing home insured with us, please view the add-on option/quote by logging into your initio dashboard and using the ‘change’ options.

Life products such as Life Insurance, Income Protection and Mortgagee Protection 

We do not offer life or income protection insurance. Life insurance ensures your loved ones are financially supported in the event of your passing, covering expenses like funeral costs and living expenses. Income protection insurance provides a regular income if you can’t work due to illness or injury, helping cover essential living costs. For these needs, we recommend consulting with specialised providers to get the comprehensive cover and peace of mind you deserve.

Travel 

Planning a trip can be exciting, but it also comes with its own set of risks. Unfortunately, initio does not offer travel insurance. This means we do not cover trip cancellations, lost luggage, or travel-related disruptions. For these specific needs, we recommend looking into specialised travel insurance providers who can offer you the necessary peace of mind for your journeys.

Medical 

Health and well-being are paramount, but initio does not provide medical insurance. Whether you need coverage for regular check-ups, emergency medical care, or long-term health treatments, you will need to find a dedicated health insurance provider. Our focus remains on property and vehicle insurance, ensuring that your primary assets are well protected.

Homes in transit

Moving homes can be a stressful experience, and ensuring your belongings are covered during the move is important. Unfortunately, initio does not offer insurance specifically for homes in transit. This means we do not cover any damage or loss that might occur while your belongings are being moved from one property to another. For coverage during your move, you will need to explore options with specialised moving insurance providers or seek transit cover from a broader insurance policy that includes this specific protection.

Contract works 

We don’t have a product at into for contract works.  If you’re renovating and making any structural alterations to your property, a standard house insurance policy won’t cover construction-related losses. For this, you need a Contract Works policy. This specialised insurance covers both the work being done and your home against construction-related losses. This can include issues like water damage from exposed cladding or structural damage caused by the renovations.

To make this easy for you, we’ve partnered with Builtin to offer the perfect Contract Works insurance solution. With Builtin, you can ensure that your renovation project is fully protected.

Body corporates

We cannot insure properties that are owned under a Body Corporate. Our cover is designed for domestic residential houses that have a single owner. Under a Body Corporate, there is a manager that collectively is responsible for insuring all the units on behalf of each owner. This is common where there’s a large number of living units, such as an apartment block.

Commercial/Business

We don’t provide commercial insurance at this time. Our primary focus is on landlords and homeowners, ensuring your residential properties are covered with the best possible policies. Commercial or business insurance is designed to protect businesses from a variety of risks. This type of insurance typically includes coverage for property damage, liability, and employee-related risks. It can protect against losses from events such as fires, theft, and lawsuits, and can also include specialised coverage like business interruption insurance, which helps cover lost income if your business is temporarily unable to operate. For business insurance needs, we recommend seeking specialised providers to get the tailored coverage your business requires.

Vacant Lots/Land or Lots/Land with only an Outbuilding

We only insure homes you can actually live in — so if it’s just a patch of grass, a shed (or a future dream build), we can’t provide cover until there’s a house on it.

Pet Health Insurance 

While we love pets as much as you do, we don’t offer pet insurance. We recommend checking with providers who specialise in this area to find the best cover for your furry friends. We do, however, cover damage caused to your property by pets.

Motorcycles, caravans, tractors and classic cars 

Generally speaking, motor vehicles (including quad bikes, motorbikes, and tractors) aren’t covered under your initio contents insurance. The only exception is for small, domestic-use vehicles listed in the policy definition of contents, such as electric wheelchairs, mobility scooters, golf carts, or children’s motorbikes under 50cc that are used only off-road. If you want cover for larger or road-legal vehicles like quad bikes, motorbikes, or tractors, you’ll need to arrange a separate motor vehicle insurance policy with a specialist provider, as this isn’t something initio offers.

Boats, jet skis, and other watercraft

Our cover doesn’t extend to boats, jet skis, or other types of powered watercraft. These fall outside the definition of household contents and need their own specialist cover. If you own watercraft, you’ll need to arrange a separate policy designed for marine risks, as they aren’t included under your home, landlord, or holiday home contents insurance.

Why these limitations?

Our goal is to offer you the most effective and straightforward insurance solutions. By focusing on specific areas, we ensure that our policies are comprehensive, easy to understand, and tailored to your needs. We believe that doing a few things exceptionally well is better than spreading ourselves too thin.

What we DO cover

For pretty much everything else, we’ve got you covered! We provide a wide range of insurance options to keep you protected. If you’re not sure which is the best cover for your situation, we recommend you visit our ‘help me choose’ page. Here’s a simple breakdown of our current insurance options:

• Home and contents
• Landlord
• Holiday homes
• Multi-unit rentals
• Own home, sometimes rented out
• Two dwellings on the same property
• House flip
• Vehicle insurance (only available to current policy-holders)

What we do best

We pride ourselves on providing excellent cover for your property. Our policies are designed to be simple, effective, and hassle-free. We’re always here to help you find the best solution for your insurance needs.

If you have any questions or need further clarification about what we cover, feel free to reach out. We’re here to help!

Final thoughts

While we do cover a whole heap of things, here are a few others we also don’t cover, just in case you were wondering:

• Pet dragons – Sorry, your fire-breathing friend is a bit too hot to handle.
• Alien abductions – We haven’t quite figured out how to insure intergalactic incidents yet.
• Time travel mishaps – If your time machine breaks down in 2050, you’re on your own!
• Unicorn stables – Magical creature houses aren’t covered, but we admire your imagination.

If none of this applies to you…

Great! You’re probably exactly the kind of property owner we can cover. Getting a quote takes just a minute, and there’s no paperwork or waiting.

Get a quote

• What is initio and how does it work?
• Initio’s policy wordings
• Technology you can trust
• How do I add contents insurance to my policy?

Running a business from home has become increasingly common, but knowing when your home insurance is enough – and when you need to look at commercial insurance – can be tricky. Here’s what you need to know.

Initio’s home products cover your residential home and any domestic outbuildings used for residential purposes, so long as they’re within your home’s residential boundaries.

Unless agreed otherwise, your policy will usually not cover any part of the home or any outbuilding used for business or commercial purposes, other than a home office.

Does house insurance cover your home office?

If you have a room in your home or an outbuilding that you use solely as a home office for clerical purposes then your policy will cover that part of the home. This is especially true if you’re simply using a space for paperwork, meetings, or computer-based work – something that doesn’t involve much physical activity or storage of stock.

If you have home contents insurance insured with initio, your own home contents cover is also extended to include office furniture and office equipment that is used for earning income. The furniture and equipment are covered for up to $10,000 whilst at the home and for up to $1500 whilst temporarily removed within New Zealand.

When you need Commercial Insurance;

For your Home

As soon as your home business goes beyond a simple home office or consultancy work, you’ll likely need a commercial insurance solution or special terms. If you’re storing stock, using specialised equipment, or running a business that involves physical labour (even if it’s within a garage or basement), it’s likely that standard home insurance won’t be enough. When you run any business from your residence (outside of a home office) we recommend getting in touch for specific advice. Depending upon the type and extent of the business, you may require commercial insurance. An example of such, would be a wood-working business run from the garage, whereas an occupation such as beauty therapy being run from one room can potentially be included in your home policy by agreement with the insurer.

For your contents

If you use tools or equipment from home to earn income, such as a builder’s or mechanic’s tools, it’s important to know that they are not covered under your standard home contents insurance policy. Even if you use these items for personal reasons, they require commercial insurance if they’re also used for work.

A common scenario is when tools are stolen from a car or home. You make a claim, but the insurer declines it because the tools are classified as income-earning equipment. Some may assume they can claim under their employer’s commercial policy, which often provides for ’employee tools.’ However, these claims are usually subject to a much higher theft excess, typically $2500.

To avoid this, it’s best to organise your own commercial insurance for tools and contents used for business purposes. Keep in mind, commercial policies come with higher excesses. Typically, these might look like:

• $500 standard excess
• $1,000 burglary excess (forced entry or exit)
• $2,500 theft excess (no forced entry or exit)

By getting the right cover in place, you can avoid surprises if something goes wrong.

Your liability

Our owner-occupied home policy covers your liability for activities you undertake as a homeowner and our landlord policy covers your liability for activities you undertake as a landlord or provider of short term holiday home accommodation . There is no cover provided for any liability arising from other business activities. If you own or run a business from home, you would need to arrange separate liability insurance cover through a commercial insurance provider or broker, which may include a public and products liability policy, and statutory liability policy.

Case-by-case

Ultimately, each business is different, and insurers will assess whether your business falls under home insurance or requires a commercial policy on a case-by-case basis. If you’re unsure, it’s always best to check with your insurance provider to make sure you’re properly covered.

In summary, once your business grows beyond a simple home office, it’s time to consider a commercial insurance solution to protect your assets and operations.

Useful links

• Things we don’t cover at initio
• What kind of insurance does initio cover?
• Help me choose my insurance
• How property use affects your cover

For many people, insurance is the ultimate grudge spend. Along with council rates it typically represents one of the most significant expenses associated with home ownership.

Because of the intangible nature of insurance, and its status as everyone’s most hated expense, the insurance industry often gets a bad reputation from the public. Currently, the insurance industry in New Zealand is facing all-time lowest levels of trust among the general public. Here at initio, we are challenging this and the traditional practice of insurance by making insurance easier and more accessible.

To help increase the trust we thought we would break-down the top house insurance myths we encounter:

1. “I have paid my premium, why do I have to pay an excess?”

A common grievance towards insurance companies arises from the customer’s responsibility to pay their excess come claim time. It may seem unreasonable to have to contribute the excess cost towards your claim when you have already paid for your premium. However; there are good reasons that insurance companies will charge an excess:

a) To avoid small claims

If there was no excess on insurance policies then people would rightfully be able to lodge small claims (think $80, $50 or even $10) that would make up a significant portion of total claims. Management, payment, and processing of claims is one of the largest operating costs of an insurance company.  For example, for most clunky insurance companies to process a $150 claim, is more than the value of the claim itself.  A high volume of such small claims would bloat the expenses for the insurance company, ultimately resulting in higher premiums for customers. Charging a minimum excess is the insurance company’s way of keeping premiums down while making sure they are covering the important stuff – not every broken toy or sock lost in the washer.

b) As a measure of self-insurance.

Insurers also give the option to customers of a higher excess above the minimum. This is a means of self-insurance where those that are more willing to cover additional costs towards a claim can get a reduction in premium via an increase in their excess.  Initio for example provides the option of a $2,000 house insurance excess – which was as a result of customer feedback.

2. “Insurers will screw you over with the fine-print”

Whether it’s from a bad claims experience, or a general distrust for insurance companies – people often hold a grudge against insurers. Customers often think insurers are looking for a way out of paying  claims and that they will use the fine-print to do it. This may reign true, however will usually reference back to conditions included in the policy wording – and hence the insurance agreement.

The problem isn’t the fine print, the policy wording didn’t change from when the cover was started.  The argument is more around the interpretation of the policy and we are the first to agree that this isn’t always straightforward.  Policy wordings need to get rid of the jargon and be written in plain english.

At initio, we are taking the Reserve Bank’s (New Zealand’s Financial Regulator) recommendation for clearer, more understandable insurance very seriously. We have prioritised easy to understand policy wordings, compiled to clearly show details of our customers cover, and published real life examples of claims we have paid and scenarios that are not claimable.

Whilst we don’t expect everyone to read each policy wording back to front, there are parts of our policy that are very important to be known to the customer. Therefore it is important for people to take time to get familiar with the useful policy information we provide so that they are not left surprised with unexpected conditions in the event of a claim.

To read our full Home and Contents policy wordings please visit the following links:

Home Insurance

Contents Insurance 

For a useful comparison between our policy wording and other covers across popular insurers in New Zealand, visit https://initio.co.nz/#comparison

3. “Insurance companies are just there to make profit not friends”

Perhaps the most truthful stereotype we hear is that people believe insurance companies are there to make money. While this is true; companies have an obligation to shareholders to return a profit, they also have an obligation to pay claims. If insurers were forced to pay out the same amount that they received in premiums and were essentially not there to make money, no insurance companies would exist. Like any business there are various operating costs for an insurance company that include managing claims, administration costs, reinsurance (insurance for insurance companies) and many more.

An insurance company will aim to adjust their price and policy so that the amount paid out for claims is less than that received in premiums. The proportion of this is called the insurer’s ‘loss ratio’. Historically, a domestic house insurer might set up their strategy and pricing to aim for a loss ratio of 60%. Then once the costs of operating the company (including significant re-insurance costs for widespread earthquake losses) are deducted, an approximate profit margin of 3-8% on the original premiums received might be earned by the insurance company – although this varies based on good and bad years.

When you purchase insurance you are buying a product that gives you peace of mind that you are covered when disaster strikes. Like any other product you buy, the seller needs to make a profit to survive.  Effectively with insurance you are pooling your premiums with other customers to receive protection should something go wrong.  The insurance company is the administrator of these funds and takes the risk (and the margin) of doing so.

4. “You’re better off not bothering with insurance and having your own emergency fund”

Perhaps a myth popular with those who most distrust insurance companies is that you are better off forgetting about insurance completely and putting away the money you save on premiums each year into your own ’emergency fund’. This is the most extreme case of self-insurance. This could certainly be a practical solution for the most disciplined people with a comprehensive approach to reducing their risk. However, there are some obvious pitfalls and major challenges to this approach.

You are likely to experience several years where you are effectively un-insured while you build up your fund. After a number of years have passed you might have saved enough to adequately cover minor losses. However, it will take many many years; if not your whole life, to accumulate enough for a worst case scenario loss.  If you put aside $1,500 a year for 50 years at current interest rates you would save $127,000, which seems reasonable, but when you adjust for inflation, that $127,000 only represents $47,000 of todays money.   Would that be enough to replace your home and contents in a total loss fire? And could you trust yourself not to ‘borrow’ from the fund? The decision to take out insurance can have a life changing effect on you in the event of a disaster – for the better or the worse.

Remember that when you purchase insurance, not only are you buying cover when things go wrong – but you are obtaining piece of mind to enjoy a less stressful life.

Useful articles

• Top five mistakes to avoid when insuring property
• Five fundamentals of house insurance

Contents cover with initio protects the things you own inside your property, but what’s included (and how it’s covered) depends on the type of policy you have.

Whether it’s your own home, a rental, or a holiday home, the level of cover and the items it applies to are different.
This guide explains each type so you can choose the right cover and set an accurate contents sum insured.

Own home contents cover (Owner Occupied)

If you live in the home yourself, contents cover protects your personal belongings from sudden and accidental loss or damage – whether they’re inside the home, in transit, or temporarily away from home.

Key features:

• Repair or replacement – Most items are covered on a replacement basis, meaning we’ll repair or replace them with new (if it’s economical to do so). Items like clothing, books, and certain electronics are covered for their present value.
• Coverage away from home – Your contents are covered when temporarily removed, whether they’re in storage with prior approval, travelling anywhere in New Zealand, or on short overseas trips to Australia and the South Pacific (up to $5,000 per trip).
• Extra benefits – Includes cover for things like alternative accommodation, contents in transit, home office equipment, hidden gradual damage, keys and locks, frozen food, and stress payments after a total loss.
• Limits for certain items – Jewellery, watches, cash, and similar items have set limits unless specifically listed on your policy.
  See our guide on what’s a specified item and when you should list it for more details.

Landlord contents cover

If your property is rented out, landlord contents cover is for the household items you own that stay at the property for tenants to use – for example, curtains, whiteware, or furniture. Cover is limited to the insured property address.

Key differences:

• Cover type – Items less than 5 years old are replaced with new equivalents; older items are covered for their present value.
• Location-specific – Contents are covered while they’re at the insured rental property or in transit to it (with prior approval if in storage).
• Tenant-related risks – Includes extended protection under your landlord’s policy for intentional acts, theft, or vandalism by tenants (up to $25,000 combined for the home and contents, within which the contents sum insured applies).
  Learn more about landlord’s protection and intentional damage cover.
• Meth contamination – Covers loss to contents caused by contamination, within the overall limit for meth claims shown on your schedule.
  See our meth contamination cover guide for details.
• Natural disaster – Covered on the same terms as the home, up to your contents sum insured.

Common landlord contents examples:

• Curtains, blinds, and other window coverings
• Carpets, rugs, and floor coverings not permanently fixed
• Light fittings and lamps that aren’t part of the building structure
• Whiteware like fridges, freezers, washing machines, dryers, and dishwashers
• Freestanding stoves or microwaves
• Furniture such as couches, beds, tables, and chairs (if the rental is furnished)
• Heat pumps or portable heaters that aren’t fixed to the property
• Outdoor furniture and BBQs provided for tenant use
• Small appliances like kettles, toasters, and vacuum cleaners

Examples of what’s not covered: Owner’s personal belongings, vehicles, watercraft, pets, or items not kept at the insured address.

Holiday home contents cover

Holiday home contents cover works much like landlord contents cover – it applies to the items you keep at the holiday home for your own use or for guests. Cover is limited to the insured property address.

Key points:

• Similar cover to landlord contents – Replacement for items under 5 years old, present value for older items and certain categories.
• Guest or short-term rental protection – If your holiday home is rented out at times, tenant-related intentional acts or theft may also be covered under the same landlord’s protection and meth contamination benefits.
• Seasonal occupancy rules – To maintain cover while the home is unoccupied, the home must be inspected regularly and basic security and maintenance steps followed.
  See our holiday home insurance tips for keeping cover valid.
• Natural disaster – Covered up to your contents sum insured, with the same EQC top-up process as for landlord policies.

Common holiday home contents examples:

• Bedding, linen, and towels
• Kitchenware (pots, pans, utensils, cutlery, crockery, glassware)
• Whiteware (fridges, freezers, ovens, microwaves)
• Furniture for living areas, bedrooms, and dining rooms
• TVs, stereos, and entertainment equipment
• Outdoor furniture, umbrellas, and BBQs
• Hobby and leisure gear typically kept for guest use (e.g. board games, puzzles, books)
• Small appliances like coffee machines, blenders, and toasters
• Décor items like lamps, cushions, wall art

Examples of what’s not covered: Owner’s personal belongings, high-value sporting equipment not kept for guest use, vehicles, watercraft, pets, or items not kept at the insured address.

Tip: When setting your contents sum insured, think about what’s actually at the property. For your own home, this means everything you own. For a rental or holiday home, it’s just the items you provide for tenants or guests.

If you’re unsure where to start, use the CoreLogic contents calculator to help estimate the replacement value of your belongings.

If you’re still unsure, you can reach out to us directly – or even use an AI chat tool to quickly search your policy for specific details – just remember to always double-check the results!

Ready to begin your journey with initio?  Start with a quote

Can I get contents insurance by itself?

It’s worth noting that initio does not currently offer stand-alone contents insurance. To get contents cover, it must be added to an active insurance policy for the same property. If you only need to insure your contents, such as when you’re renting or not insuring the home itself, initio is not able to provide contents cover.

Related articles:

• What items are automatically covered under house contents insurance?
• Are there limits to how much I can claim for my contents?
• Guide to landlord insurance
• Do I have contents insurance?
• How do I add contents insurance to my policy?