Flood risk is becoming an increasingly significant issue for property owners in New Zealand due to the growing frequency and severity of weather events. This risk often translates into financial hardship due to the damage caused and the potential for increased insurance premiums. Certain areas, like Edgecumbe and Westport, for example, face heightened challenges, with insurance becoming harder to secure.

To help you navigate these challenges, this guide combines insights on flood risk assessment and the implications of living in flood zones, using advanced tools like Risk Management Solutions (RMS) and council-provided data.

Measuring flood risk

Flood risk is determined by two key factors:

• Frequency: How often floods are likely to occur.
• Severity: The potential impact and damage caused by those floods.

Initio is committed to providing transparent and accurate information to help you protect your property. 

At initio, we use Risk Management Solutions (RMS) data to assess properties’ flood risk. RMS is a global leader in risk modelling and analytics. They use advanced technologies, scientific data, and sophisticated modelling techniques to assess natural disaster risks, including flooding.  RMS determines flood layers by analysing:

• Historical flood data
• Topographical information (land elevation and shapes)
• River systems and water flow patterns
• Rainfall data and climate patterns
• Soil types and ground absorption rates
• Man-made structures like dams and levees

When you get a quote, and the property you’re quoting is in a flood risk zone according to the RMS modeling, we will show you a message detailing what risk has been found. These are as follows:

• “Flood Risk – RMS Flood 50 Year Return”: There’s a 1 in 50 chance of a significant flood in any year, or a 2% chance of a flood occurring in any year.
• “Flood Risk – RMS Flood 30 Year Return”: This indicates a 1 in 30 chance of significant flooding each year, or a 3.3% chance of a flood occurring in any year.

These year values represent the probability for the scale of flooding that needs to occur for the water to reach this property. So when you hear about “one in a hundred year flood”, or “one in 50 year floods”, that is what those flood risks mean; if a “one in 30 year flood” occurs, water is likely to reach properties that fall in the RMS 30 Year flood model.

The risk information don’t mean that a flood will only happen once in 100, 50, or 30 years.  As we saw with the Auckland flood events from 2023, multiple flood events can occur in quick succession.Ultimately these are modeled risks, and real world outcomes may vary, but they are a way to better predict flood risks and keep insurance accessible for New Zealand.

However, it’s crucial to understand that frequency doesn’t always correlate directly with severity. Flood severity refers to how damaging a flood might be, regardless of frequency. For instance, a less frequent flood might cause significant damage if it is severe, while a more frequent flood might have a lower impact.

When you get a quote online, if there is a flood risk associated with the address you have provided we will display the risk found on the RMS dataset based on the location of the property.

This information helps determine whether we can offer immediate insurance cover or if further review is needed. However, it’s important to note that these are probabilistic models and real-world outcomes may differ.

Understanding flood severity

While frequency tells us how often flooding might occur, severity helps us understand the potential impact on your specific property. We assess severity by looking at several key factors that combine to create a complete picture of risk:

• Predicted flood water depths (ranging from shallow surface flooding to depths of over 3 meters)

• The percentage of land potentially affected

• Your building’s position on the property

• Natural drainage patterns

• Existing flood protection measures

• The building’s design and construction

The interaction between these factors can significantly influence the actual risk to your property. Here are some examples:

• A property might be in a 30-year flood zone with a predicted 2.5-meter water depth, but if this only affects a small corner of the section where no buildings stand, the practical risk might be manageable.

• Conversely, a property in a 50-year zone with a lower 0.5-meter predicted depth could present higher risks if the water would cover most of the land and directly impact the building.

• A property with moderate flood frequency but high predicted water depths (3+ meters) covering significant building areas would typically represent a more serious risk which may be outside of our capacity to insure.

Our website continually evolves as data and modeling capabilities improve. The rules we use to evaluate properties are regularly updated to reflect the latest RMS data and our growing understanding of flood risks in New Zealand. This means that assessments can change over time as we refine our approach and incorporate new information about flood risks and their potential impacts.

At Initio, we use this comprehensive understanding of both frequency and severity to make balanced insurance decisions. Our approach is designed to be practical – we can typically provide coverage even when some flood risk is present, however not all properties are able to be insured by Initio, depending on the risks involved.

Understanding Flood Zones and Mapping Tools

In addition to RMS data, tools like the Searise website,  local council hazard maps, the property’s history and your own LIM report provide valuable insights into flood risks. These tools help both insurers and property owners understand sea-level rise, vertical land movement, and local flood hazards. With these resources, you can view your property’s flood risk, explore hazards like river overflow and storm surges, and prepare accordingly.

Searise example

Auckland Council flood mapping example

Local councils also play a crucial role in managing flood risk by improving infrastructure, such as drainage systems, which are increasingly under pressure. Ensuring that these systems are up to standard is essential in reducing flood risks for homeowners.

Why might my council’s flood risk assessment differ from RMS data?

It’s possible that your local council’s flood risk assessment may differ from the RMS data we use. This can happen for several reasons:

• Updated information: RMS may have access to more recent data or use more advanced modeling techniques.
• Different focus: Council assessments might focus on specific local concerns, while RMS provides a standardized national assessment.
• Varying methodologies: The methods used to assess flood risk can differ between organizations.
• Broader considerations: RMS data may take into account factors beyond what local councils typically consider.

If you have concerns about discrepancies between council and RMS assessments, we encourage you to contact us for further clarification.

How Does Flood Risk Impact Insurance?

Suppose your property falls within a high-risk flood zone. In that case, initio uses all information available to help decide whether immediate insurance cover can be offered or if custom terms would be required. 

While insurance can help protect against flood-related damage, it’s important to manage the risks proactively. This might involve flood-proofing your property, improving drainage, or making structural changes to better withstand flood events.

Flood risk can vary across properties depending on:

• Specific property location within a flood zone.
• Local topography and elevation.
• Drainage systems and recent land developments.

What If I’ve Reduced My Flood Risk?

If you’ve taken steps to reduce your property’s flood risk, such as installing barriers or improving drainage, let us know. These improvements would be considered when assessing your property’s flood risk for insurance purposes.

Summary

With the growing threat of severe weather events, understanding flood risk and using available resources is essential for property owners in New Zealand. By leveraging data from tools like RMS and local flood maps, you can make informed decisions, better protect your property, and ensure you are adequately insured.

For more information or help understanding your property’s flood risk, reach out to our support team at initio. We’re here to provide the transparency and guidance you need to manage these risks effectively.

Remember, understanding your flood risk is the first step in protecting your property. Stay informed and prepared!

Related articles & useful links

• Five tips to insuring in a flood zone
• Risk Management Solutions RMS
• Searise
• Auckland Council’s flood zone maps
• What is an alluvial fan – and why does it matter for property owners?

IMPORTANT – RMS Moody’s disclaimer

This report, and the analyses, catastrophe modelling results and predictions contained herein (“Information”), are based on data provided by Initio Limited, and compiled using proprietary computer risk assessment technology of Moody’s Analytics, Inc. and its affiliates (“Moody’s”). This Information is a single copy, copyright protected work of Moody’s that contains confidential and proprietary information of Moody’s. As with any model of physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. Furthermore, the accuracy of predictions depends largely on the accuracy and quality of the data used by Initio Limited. The Information is owned by Client or provided under license to Initio Limited and is either Client’s or Moody’s’ proprietary and confidential information and may not be shared with any third party without the prior written consent of both Initio Limited and Moody’s. Furthermore, this Information may only be used by the recipient in connection with, as applicable, (i) Initio Limited’s imminent placement of insurance or reinsurance; or (ii) the recipient’s 3 regulatory activities in relation to Initio Limited; and always for internal purposes only and for no other purpose, and may not be used under any circumstances in the development or calibration of any product or service offering that competes with Moody’s. You are not authorized to use, copy, modify, disclose, and/or distribute this Information in whole or in part in any form, except as expressly and specifically permitted under a written agreement signed by Moody’s. Any unauthorized use, copying, modification, disclosure, or distribution of this Information will constitute an infringement of Moody’s intellectual property and your agreement to pay list price for the use of the product or application associated with this Information, in addition to any applicable penalties or damages or other remedies available under applicable law. The recipient of this Information is further advised that Moody’s is not engaged in the insurance, reinsurance, or related industries, and that the Information provided is not intended to constitute professional advice. Moody’s including its parent, subsidiary and other affiliated companies are all beneficiaries of this disclaimer. MOODY’S (AND ITS PARENT, SUBSIDIARY AND OTHER AFFILIATED COMPANIES) SPECIFICALLY DISCLAIMS ANY AND ALL RESPONSIBILITIES, OBLIGATIONS AND LIABILITY WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE INFORMATION OR USE THEREOF, INCLUDING ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL MOODY’S (OR ITS PARENT, SUBSIDIARY, OR OTHER AFFILIATED COMPANIES) BE LIABLE FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE CONTENTS OF THIS INFORMATION OR USE THEREOF.

It can be a shock for your vehicle to be damaged – whether you’ve been in an accident, had your vehicle stolen, or discovered it damaged in a parking lot.  We’re here to help, so when you’re ready and able, lodge your claim online and we can guide you through the process. 

In the meantime, here are some FAQs for what information to collect, and how vehicle claims are processed.  

If you have further questions about vehicle claims, chat with us, or you can e-mail or phone the initio claims team. 

What information should I gather when my vehicle has been damaged? 

Recording the damage and the other people involved straight away helps us in processing your claim.

• Photos – Take clear, detailed photos of the damage from multiple angles. If you can, capture the surrounding area to provide context, such as where the car was parked and any possible sources of the damage.
• Witnesses and CCTV – Check if there are any witnesses who might have seen what happened. Also, see if there are any nearby CCTV cameras that might have recorded the incident. If you find witnesses, gather their contact information and a brief statement. CCTV is usually available from the local council. You will need to reach out to them directly to obtain this as we are unable to request the footage on your behalf.
• Police – Record the Police reference number and the name of any attending officers. If your vehicle was stolen, report the matter to Police – you can do this online. 
• Other drivers – Record the name, address, contact details (mobile and e-mail address) of other drivers when possible. Confirm whether they have insurance and who with. Provide other drivers with your details where appropriate, and let them know you’re insured with initio. 

Include as much information as possible when you lodge your claim online with us. 

How do I arrange an alternative vehicle under my claim if mine is undrivable? 

Under our alternative transport additional benefit, we will contribute towards the reasonable hire costs incurred if you need a rental vehicle following a loss covered by the policy while your car is being repaired, is not fit to drive while awaiting repair, or is awaiting settlement of a total loss claim. Please note that this benefit only applies to claims on Full Cover policies, and can only be applied once your claim has been accepted.

This benefit is provided on the condition that we have arranged the rental vehicle through our approved supplier, or where you have arranged a quote yourself, we have reviewed this and accepted the quote as fair and reasonable. You will need to contribute $20 per day (paid to our supplier when the rental vehicle is obtained), pay any bond or deposit, and cover all running costs. We will contribute towards these costs for a maximum of 14 days.

More information on this can be found on page 6 of initio’s motor vehicle policy wording under the heading ‘Alternative Transport’.

If you would like to utilize this policy benefit, please let the person handling your vehicle claim know and they will be able to assist with these arrangements. 

What happens if my vehicle is written off (also called a “total loss”)? 

If your vehicle can’t economically be repaired, or has been stolen and not recovered within 7 days, then we would settle your claim at the Agreed Value of your vehicle, which is the value you selected when the policy was taken out/renewed.  We will deduct your excess from the settlement if it has not been waived. 

Some or all of the settlement money might have to be paid to your finance company if there is security registered over the vehicle. We will let you know where the settlement will be paid as part of the claim. 

Initio (and our underwriters) take ownership of the vehicle wreck and will deregister and then sell it to recover some of the costs. 

Where will my vehicle be assessed and repaired? 

You can use a repairer of your choice, or one from our approved repairers network.

If you would like us to help you choose a repairer, we’ll recommend one of our approved repairers. These repairers come with:

• A quality guarantee
• Pre-authorisation to repair damage, speeding up the repair process
• Loan vehicles usually on hand

When do I pay my excess? 

If you have Full Cover and your excess has not been waived, you will generally pay your excess to the repairer when you collect the vehicle. 

If you have Third Party Only cover, and are responsible for damage to someone else’s vehicle, then we will send you an invoice for payment of your excess before we settle the costs to the other party. 

Does initio cover tyre repairs?

Generally, insurance isn’t designed to cover punctures, cuts or bursting of tyres, and you are not covered for damage caused by breaking. If you have Roadside Assist, they can assist you with fitting your spare tyre or getting your car towed safely to a tyre repair centre for you to arrange repair/replacement at your own costs.

Initio can only look to consider cover for tyre punctures, cuts or bursting of tyres due to the following causes: fire, collision, overturning, malicious damage, theft or conversion, or natural disaster. 

Related articles

• More about our car insurance
• Report your stolen vehicle (external link)
• What is driver grade?
• How do I buy my first vehicle policy?
• Is your windscreen damaged?

Want to check over the full details of your cover? It’s best to read your policy wording. You should also check your summary policy schedule from your dashboard to see what applies to your cover.

If you’re not sure what everything means, our guide on how to read an insurance policy walks you through each section in a simple, easy-to-follow way.

Owner-occupied Homes

See our full house insurance policy wording below. If you’ve included contents with your cover, download the separate contents insurance wording.

Download House Wording    Download Contents Wording

Rental properties (including multi-units) and Holiday homes

Our holiday home and landlord cover are both under the below combined policy wording. To see what applies to your policy, it pays to check your policy schedule.

Download Landlord Wording

Car Insurance

See all the details of our comprehensive car insurance cover below.

Download Car Wording

If you have any questions about your cover, feel free to get in touch with our friendly team.

Related articles

• Technology you can trust
• Compare insurance
• Am I covered for natural disasters?
• How to calculate your sum insured
• Why has my premium changed?

Our robust cover means it’s not the end of the world if you use your car for some business use. You’re still covered as long as it’s not being used for any of the below.

Business use that is NOT covered:

Your car will not be covered if used for the following:

1. Ride-sharing, or carrying fare-paying passengers such as a Taxi, or Uber.
2. Courier or delivery business (including food delivery such as UberEats).
3. In connection with a trade or servicing business that does any installation, maintenance, cleaning or repair work on homes.
4. To carry goods or samples for financial gain or reward, as part of any business (apart from Farming)
5. As part of any motor (or automotive) trade profession (such as a mechanic)
6. Formal driver training or education.
7. Towing for reward (e.g. to a tow another car)
8. Car being hired out (e.g. a peer to peer hire)

If your car is used for any of the activities listed above, our policy is not suitable.  We would recommend purchasing commercial cover – typically available through an insurance broker or commercial insurer.

What if I don’t usually use it for the above activities but that changes later?

Your vehicle won’t be covered at any time it’s used for any of the excluded activities listed above. If you’re involved in an accident while using the vehicle for any of those purposes, your initio policy won’t respond – and the claim would be declined.

Will my cover include damage to or replacement of the car’s signwriting?

No, our policy does not include cover for any vehicle signwriting.

So, is all other business use covered?

Yes! For any business activity not listed under the exclusions above, your car can be covered – even while performing that business task.

Our policy acts as a hybrid between private and commercial cover, designed to accommodate most other business uses.

Examples of covered occupations (not exhaustive):

• Office professionals visiting clients.
• Property managers driving to properties for inspections or viewings.
• Property Owners carrying out work on their own rentals
• Farmers using a ute for on- and off-farm activities to run their operations.
• Real estate agents or salespeople traveling for work.

Still unsure?

If you’re uncertain whether your business use is covered, get in touch with us – we’re here to help clarify!

Other articles of interest

• How do I buy my first vehicle policy?
• How do I make changes to my vehicle policy?
• Car insurance basics
• Roadside assist for initio vehicle customers

When you insure your belongings, you pick a total amount of cover for everything. But, some items still have a sub-limit on how much they’re covered for.  For the items in the table below, if you think something is worth more than this limit, you can add it as a specified item. The described, specified item will then have a high upper limit in the event of a claim.

If you’ve already got your Own Home contents cover with initio and want to add a specified item, please login to your initio dashboard and use the “change” and then “cover” options to specify any of the below items in your contents cover.  More information about making changes to an existing policy can be found here.

The limits on jewellery, watches, bicycles, drones and collections can be increased if you specify a higher amount (for up to a maximum limit of $20,000 per item).  The watersport equipment can be increased for equipment but not for any watercraft.  For example, a fishing rod valued over $2,000 can be specified but a powered, runabout dinghy over $2,000 cannot.  The powered dinghy would require a separate marine policy.

It’s important to note that some categories of contents are still insured for their present value (read more), so make sure you are specifying the amount for present value or replacement value depending which applies.

As an example, bikes are insured for their present value. If you purchased an e-bike 2 years ago for $8,000 it may only be worth $5,000 today (present value). In the event of a claim, your settlement would be based on the present value, (in this example $5,000). Since this is over the $2,000 policy limit for bicycles, you would need to specify the present value, otherwise the claim would be limited to $2,000.

Since the present and replacement value of items changes over time, we recommend that each year you check the present or replacement values (depending which applies) for your items. If they’re insured for more than their value (replacement or present value, depending on the type of contents), you’re paying extra for no real benefit.

Multiple Items of Jewellery

For any single piece of jewellery or watch, there is a policy limit of $3,000 unless the item is noted as a specified item.

For any jewellery that is not specifically specified there is a maximum payment limit for any one event.

Unless a different maximum payment amount is shown in the schedule, the most we will pay for any event for multiple items of jewellery and watches (that are not separately specified) is $15,000.

For example, if you lose 10 pieces of jewellery in one event, each with a value of $2,000, the most we will pay is $15,000 unless we have previously agreed to increase the limit to $20,000..

Camera or Camera Equipment

Any piece of camera equipment is limited to $3,000 per item unless specified.  Please note that our contents policy does not cover items used for earning income.  If you use your camera equipment for earning income, you will require a separate commercial insurance.

E-Bikes

We can insure e-bikes on your contents policy provided that they are “pedal operated bicycles with motor assistance” If the motor is the primary source to propel the bicycle then the NZTA considers those to be classed as a vehicle and they would therefore need to be insured under a motorcycle cover. Visit NZTA to learn more. Don’t forget to specify your e-bike if its present value is over $2,000.

Drones / Remote controlled aircraft

The cover is automatically provided under your existing home contents policy for drones and their accessories for up to $3,000, provided the drone is;

• only used for personal use (ie. Not commercial/business) and
• is operated within NZ Aviation legislation and
• reasonable precautions/care are taken when securing and operating the drone

Drones are insured for replacement value whilst they are under 2 years old, present/market value applies for drones over 2 years old.

If you would like to know more, please contact us.

Watersport Equipment

Our contents cover does not cover any watercraft powered by motor or sail, with a value of more than $2,000.  Please arrange marine/boat insurance with a relevant provider if required.

Antiques & Works of Art

While it’s not a requirement to list these as specified items on your policy, it is important to disclose them when applying for cover (under the general disclosure question) — especially if you have individual items valued at more than $25,000.

If you have works of art or antiques individually worth more than $25,000, please provide the details when completing your insurance application. Items of this value are considered material information and need to be reviewed by our underwriters before we can confirm cover.

As part of the review, we’ll need copies of the latest valuations, along with details of any security and fire protection measures in place.

Other Valuable Items

Generally, most personal contents items don’t need to be specified separately. Examples include personal medical devices such as hearing aids or insulin pumps, musical instruments, luxury items like handbags or shoes, and electronic equipment for your own personal use. These are covered under your main contents sum insured, with no sub-limit applied.

If you’re unsure whether a specific item is covered or needs to be noted, please check your policy wording or get in touch with our support team for guidance.

Initio Replacement Contents Cover

Related support articles:

• Making changes to your cover
• What contents are covered for market value?
• Is my personal medical equipment, that I keep at home, covered? (including hearing aids)
• Is my lawnmower covered under my contents insurance policy?

Monthly insurance cover means that it is renewed and paid for each month.  It’s a month-to-month policy that automatically renews and is charged to your credit card on the same day each month.

How can I pay monthly?

You can choose to either pay monthly or annually when you first purchase a policy.  Our monthly payment is only available with a visa debit or credit card payment. We don’t offer a monthly direct debit from your bank account.

For details on switching between monthly and annual payments, check out our article on ‘Switching Payment Frequency‘.

Will you tell me if my monthly insurance payment changes?

Yes, we’ll let you know in advance if your monthly payment is going to change thirty days prior to any payment.

Your total insurance cost will typically change on the anniversary of your policy (i.e the day and month you first started the cover). This means that your monthly payment will remain the same for the year.  The exception being that if there is a government levy change (for example Fire & Emergency New Zealand levy rate change) that is mandated to be applied from the effective date of your next monthly renewal.

Each month we will send you an email confirming the renewal of your policy.  In that email, if the next month’s payment is going to be different (i.e its the anniversary renewal) we’ll let you know.

Your initio dashboard will also show you the date and amount of your current and next months payment.

When will my card be charged?

When you first purchase your policy the first payment will be withdrawn from your card on that day. All following monthly payments will be withdrawn from your card the day your policy renews (your chosen renewal date).

For example, if you buy a new policy on the 1st of January and the start date of the policy is the 5th of January, you’ll initially be charged for the first month on the purchase date, ie 1st Jan.  All future monthly payments starting from the February renewal will then be withdrawn on the 5th of each month.

What if I need to change my card details?

You can change the card that’s used for the payments at anytime.  To do so, please login to your initio dashboard and choose “credit card” from the “account” menu in the top right corner of your dashboard.  Here you can enter the new card information and any future payments will automatically default to the new card.  You can also see what card is currently registered for your payments on this screen.

What if my monthly payment fails to go through?

We’ll make four attempts in total to process the payment, you’ll receive an email notification each time — whether the payment succeeds or fails. We’ll include when the next transaction attempt will be on our email correspondence, so you can ensure funds are available at the right time.

Prior to the fourth and final Attempt:

• You can contact us prior to the final fourth attempt to request the payment to go through at an earlier preferred time. You can also trigger an earlier payment re-try by updating your credit card details kept in your initio dashboard — updating this field (even with the same card info) will automatically trigger an immediate re-try of any outstanding monthly payment.
• Get in touch with your bank if the payment has missed despite the funds being available, in some cases your bank may have put a hold on transactions for security reasons.
• Cover remains in place pending the successful payment within this time.

After the fourth and final Attempt:

If the premium remains unpaid after the final fourth attempt, the policy will lapse.  Cover then ceases back to the date of the initial missed payment.

We are unable to re-activate the original policy once it has lapsed. To re-instate the cover at this time, please do so by beginning a new policy from your initio account (dashboard) using the ‘+’ options.

What if I want to use a different card for each policy?

If you are purchasing annual insurance, you can use a different card for each and every purchase.  If you are purchasing monthly insurance, we are only currently able to facilitate one card for any monthly payments under your account.  If you wish to use a different card for a monthly policy, you will need to set up a new initio account using an alternative email address for any policy to be paid via the new card.

What if I want all my monthly policy payments to be aligned on the same day of the month?

The monthly due date automatically aligns with the original inception date of the policy.  Should you wish to change a policy’s monthly due date you would need to replace it with a new policy, effective on the preferred date.  Once the new policy is in place, you can then cancel the original policy, any unused portion of that policy will be automatically refunded.

Why does the cost of insurance change?

There are a number of reasons why your house or car insurance premiums can change each year.  Some of the more common reasons are:

• Change in the costs of materials and labour, which makes repairs to houses and cars more expensive (Covid supply chain issues put pressure on materials costs)
• Increased in the frequency and severity of weather events (Auckland Floods 2023, Nelson Floods 2022, Napier floods 2023 & 2021, Auckland tornado 2021 to name a few)
• Government earthquake levy changes
• Fire Service levy changes
• Increased re-insurance costs due to the way international insurers view New Zealand’s natural disaster risk (NZ is one of the highest risks in the world unfortunately)
• For cars, the main driver may have had birthday or an accident which changes the risk and in turn changes the premium (up or down) at the next policy anniversary renewal.

Related articles

How can I pay my premium?
How does monthly insurance work?
Switching payment frequency
Can I pay with direct debit?

If you’re doing alterations or renovations to your house you might be wondering if you’re covered by your initio house insurance policy.

Depending on the works involved you may need to arrange a Contract Works policy, also known as ‘construction insurance’ or ‘ builders all risks’ cover. Initio does not currently offer this type of cover, but you can obtain it through a contract works insurance provider, such as Builtin Insurance.

Who arranges the cover?

If you’re doing an alteration, renovation or work to your existing house, it’s generally your responsibility to arrange construction cover.

For a new build, full contract works cover is required, and is usually arranged by your builder.

Works that don’t require Contract Works cover

Cosmetic Renovations

If you are doing cosmetic renovations to your house (with no structural alterations) you don’t need a contract works policy.  Generally your house insurance policy (including the initio house insurance policies) will cover damage that occurs during the works.

What is considered ‘Cosmetic Renovations’

Cosmetic renovations are work that doesn’t involve structural alterations or changes to the house. Cosmetic renovations that are covered by a standard house insurance policy include:

• Painting
• Installing new carpet
• Replacing a toilet
• Removing non-load bearing walls

If you spill paint on your carpet while renovating, there’s cover to fix the stain. This is not considered structural construction related damage, so your standard house cover will respond.

Works that require Contract Works cover

Structural Alterations

If your work involves any structural alterations to your house, you will need a separate contract works policy to have cover for construction related losses to the existing house, and for the new work itself.

Your existing house insurance policy will stay in place to cover non-construction losses (e.g. an earthquake), and your new contract works policy will provide cover for damage to the:

a) New work (e.g. the new garage being built, or the new roof), and

b) Existing house for construction related risks (e.g. storm damage while roof repair is half complete) – please be sure to include this section on any contract works cover taken

A standard house insurance policy will not cover these risks.

People are often confused about when contract works is required, and what it covers.

What is considered ‘Structural Alterations’

Some examples of structural changes include:

• Re-roofing
• Building a new extension to the house
• Removing a load-bearing wall
• Re-cladding

It’s works that involve changes to the supporting parts of the house (e.g. bearing walls, beams or floor construction), or the weather tightness of the house (e.g. cladding and roofing). These require construction cover and a house insurance policy can’t be relied on to assist.

If you need contract works insurance, we’ve partnered with Builtin to offer you a suitable solution. Like initio, BuiltIn are underwritten by IAG so this means that you will have the same ultimate underwriter for the house and contract works risk, which is important.

Still unsure if your works are structural? Contact us and we will let you know, or contact your insurance company.

What if I do structural work but don’t get Contract Works cover?

Essentially you’re taking the risk of damage to the new works, and any construction related losses to your existing house not having cover.

This will only be covered by a contract works policy, and are excluded from your house insurance cover (see below).

Causes of loss not covered

You are not covered for loss to the home connected in any way with:

• Structural additions or structural alterations
• Water in any form (including hail and snow) entering the home because any roofing material, exterior cladding, window or door has been removed by: (a) you, or (b) any other person who is acting on your authority, or

Construction related losses that would require contract works cover (Examples)

1. 1. • Builder puts nail through water pipe, causing internal flooding.
      • Blowtorch catches fire on wiring and house extension is fire damaged throughout.
      • Builders were replacing roof, and strong storm winds ripped roofing off when it was half complete.
      • Roof trusses collapse when builders removed load bearing wall

Note that these all relate to the construction work, and cause damage to the contract site being the existing structure of the house.

Consider your Risks

It’s up to you to decide if you need contract works cover. While there’s always an element of risk with structural works, you might be happy not to have cover if you think the risk and severity of damage is low.

You should consider the price of contract works cover and the peace of mind provided. Premiums start at around $500 premium for a small project. The longer the works take, the more expensive the policy will be.

My builder has liability cover, why do I need contract works?

Most builders will have some form of their own liability insurance.  Don’t be fooled – this is not a form of contract works insurance.

What does a builder’s Public Liability cover?

It covers them for accidental damage to other people’s property they are held liable for. For example, the builder walks in the house with paint on his shoes and damages carpet.

Note that a builder cannot be held liable for something they didn’t cause (unless they are grossly negligent). If an earthquake or storm damages your work, your builder will not be to blame.

Most public liability policies also exclude property being worked on. In most cases your house is the product (so it’s unlikely there’s cover if the builder causes damage).

The upshot is you shouldn’t rely on your builders public liability policy as an alternative to contract works insurance.

Disclaimer: This support article is a guide only. It is not intended as specific advice for your situation. It is general guidance only.  Consult your insurer/provider if you have specific queries relevant to your specific situation.  

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There can be unfortunate scenarios where you may have to pay your excess more than once when you make a single house insurance claim.

We try to make insurance transparent for everyone, but there are insurance conventions that we have to work with.  Applying an excess per incident can be particularly annoying if you’re not aware of it, so here’s some help to mitigate any future frustration.

Firstly, what does house insurance usually cover?

You might already be familiar with this. House insurance covers sudden and accidental events – something unexpected that results in physical damage. This will extend to intentional damage by tenants if you have landlord’s insurance.

Your house insurance won’t cover gradual damage over time such as rotting weatherboards. Like humans, houses need maintenance to stay in working order. There is no sudden (or unexpected) event that’s causing the rotting, so there’s no insurance claim.

If you have some unexpected damage, you’ll then need to pay your excess before your insurance kicks in. However, it’s not as straightforward as it sounds – because the excess applies to each insurance ‘incident’ and not just to each claim.

So, what’s considered an ‘event’?

The ‘incident’ is the time and place the damage or loss occurred.

For example, if something caused a hole in the wall on two different days, and in two different rooms of the house, then those would be seen as different ‘incidents’ – even if the landlord found all the damage on the same day and lodged a single claim.

Each separate incident could result in a separate excess being payable on each. Which can be a nasty surprise.

Why does this have to apply?

Trust us, this is something we want to avoid, but there is a reason it applies.

If a landlord could group all bits of damage over a tenancy into a single claim with a single excess charge, you could claim on any little dents and damage around the house. House insurance would begin to look like a property maintenance cover, and ultimately the premiums and volume of claims would become astronomical, and make insurance unaffordable for everyone.

What does a ‘multiple incident’ claim look like?

The most common example we see is when a tenant moves out, and the landlord discovers they’ve left behind a lot of unreported damage – holes in walls, stains in carpets, doors with broken hinges etc.

The landlord then files a single claim for recovery of all the damage. However, if it’s clear the damage was from multiple ‘incidents’ over the course of the tenancy, an excess is applied to each one.

This means the insurance payout is either much lower, or the claim will not proceed if all the excesses exceed the repair costs.

Stains in carpet – a sight all too familiar for landlords.

Exceptions to the rule

It isn’t always the case that an excess will apply to each piece of damage. This is where it can become a little technical, and on a case-by-case basis.

Multiple bits of damage at the same time

Sometimes multiple incidents are considered to be the result of a single source event, and only one excess will apply.

• For example, if a tenant is given eviction notice, and decides to take this out on walls in anger before they leave; or if a party gets out of control, with predictable damage to doors, windows and carpets.

In these examples there is a single source that caused the event in an approximate time period. The interpretation of the source can be subjective, and every claim has its unique circumstances and will be considered on its own merits.

One excess per room

Policies are designed to cover damage resulting from a single event. When a ‘single event’ cannot be confirmed, most insurers apply an excess to each incident, meaning each stain/dent etc. However, at initio we believe this approach can be unfair, so we endeavour to apply one excess per room, per item of damage (one excess for wall damage in a bedroom, one excess for carpet damage in a room).

What about those ‘one excess’ advertisements?

Paying an excess per incident is standard practice. When insurers advertise that they charge only ‘one excess’, they are usually referring to a single event that causes damage across several policies.

For example, if a flood soaks your garage, car and some loose contents, you might only have to pay one excess – usually the highest. It’s one of those ‘check the fine print for the asterisk’ sort of promises.

What you can do to manage this risk

The best way to avoid all of this is to keep on top of the condition of your property with regular inspections. This will help identify bits of damage before they become widespread. If you’re recording the house’s condition for each inspection, you’ll also have a better idea of when damage was caused.

The best form of risk management is being a proactive landlord. Most landlord policy wordings include requirements, called landlord obligations – that you should get yourself familiar with.

Meeting these are a great way to reduce your risk; like screening tenants, monitoring rents, doing regular inspections and collecting a bond at the beginning of a tenancy.

Insurance is a two way agreement. The more you do to manage your risks, the better chance you have of avoiding an ugly multiple excess claim.

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Landlord insurance is a tailored policy for a property used as a rental.  It is different to normal house insurance.  Landlord insurance covers both the rental (your house itself) and the additional risk added by having a tenant in the property.

All homeowners are exposed to common risks such as fire damage, flood, and earthquake, but as a landlord you face an additional occupancy risk due to a tenant living in the property.  Unlike family, tenants are not generally known to you.  

How is landlord insurance different from house insurance?

In short, landlord insurance is the same as insurance for your own home, but for two big differences:

• Disclosure – use of the property: 
  Landlord insurance specifically accounts for the fact that your family does not live in the property.  This is very important.  If your rental property burns down and your insurer is not aware that it is a tenanted property the insurer could be entitled to deny your claim. 
• Additional landlord risks:
  Unlike your own home insurance, most landlord insurance includes coverage to specifically address the additional landlord risks:  

What are my additional risks as a landlord?

Accidental damage by tenants

This is where your tenant un-intentionally causes damage to the property.  For example:  they spill a glass of red wine on the carpet.  In this situation you need a landlord insurance policy in order to have a successful claim.   It is unlikely that you can recover the cost of your insurance excess from the tenant.  

Deliberate damage by tenants

Deliberate damage, also known as malicious or intention damage is usually the case when, as a landlord, you discover holes in walls and damage that is unlikely to have been the result of an accident.  Cover for this is provided by a landlord insurance policy, usually up to a limit of around $25,000.  The cover protects you from the cost of a tenant deciding to make a mess of your property.  

Loss of rents following damage

If your rental property suffers a loss that deems the house uninhabitable then you face having an un-tenanted property while the repairs are completed and the property is occupied again.   This will mean a loss of rental income.  Landlord insurance provides cover for this loss of income up to a selected value (eg $40,000) for a payout period of usually 12 months.   For major losses the cover will stop as soon as the loss of rent amount is used or the payment period ends, whichever comes sooner.  

Loss of rents resulting from eviction or abandonment

This is where your tenant is evicted from the property (by decision of the Tenancy Tribunal) or your tenant leaves without giving notice.  In both situations it means that you will be out of pocket due to loss of rental income.  Some landlord insurance policies will reimburse you for this loss of income but only up to 6 or 8 weeks, following the formal eviction or discovery of the abandonment.  

Landlord contents damage or theft

Even an unfurnished rental property had landlord contents.  The oven and curtains are contents, not house.  The tenant risk means that you could suffer a loss to these items, and this risk increases when you partially or fully furnish a property.  A landlord insurance policy protects by providing cover, usually up to a standard limit of $20,000.   Some landlord insurers provide an option to purchase more contents cover for an additional cost, which is important for furnished properties.  

Landlord liability

As a landlord you accepting money (rent) for providing a house (accomodation).  This makes means that you are in the business and with this comes additional regulatory obligations that, if breached, can cost you.  Tenants can also have a go at you if they suffer a loss because of something you did (or didn’t do).  The best example here is if a landlord did not change the locks after a previous tenant abandoned it and the new tenant was robbed (with no sign of forced entry).   Some landlord insurance policies include cover for landlord liability, meaning that if you are pursued by a tenant or a regulatory authority the insurer use their lawyers to defend you, and if you are held liable pay certain awards against you.  

Meth contamination

Meth and other illegal substances can cause significant damage to a property, especially when the substance is being manufactured.   Meth clean-up costs can easily exceed $10,000.  Reducing the risk of contamination occurring is best managed through good tenant vetting procedures and meth testing in between tenancies.  If you do suffer a contamination loss and have a robust landlord insurance policy you will have cover for up to $30,000, plus the loss of rental income incurred.  

Can I hold the tenant responsible for damage?

Yes and no.  It really depends whether the damage was accidental, intentional, or just careless.  Having a good landlord insurance policy would mean you are covered for all the causes of damage by the tenant – and then your insurers will decide whether to go after the tenant for the repair costs.  

The good news is that the Residential Tenancies Act now provides scope for landlords (and their insurers) to recover the cost of repairs or their insurance excess from the tenant.   Learn more holding tenants responsible.  It is important to note that, more often than not, tenant damage claims result in the landlord’s insurer applying more than one excess.  This is because insurance works on incidents, and each incident is a separate claim that attracts its own excess.  Learn more about how insurers look at events

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Your safety on the road is our priority, and we’ve taken comprehensive measures to ensure you’re covered in every situation. Here, you’ll find everything you need to know about our optional cover for roadside assist service.

Roadside Assist Overview

Initio, backed by IAG, is committed to providing comprehensive support to its existing customer base. Our partnership with First Rescue enables us to offer a wide range of roadside assistance services. Whether you’re facing a flat battery, lost keys, or a breakdown, our support team is always here to help.

With our new Roadside Assist portal, getting back on the road has never been easier:

Roadside Assist portal

You can also reach Roadside Assistance at 0800 694 555.

Roadside Assist Services Include:

• Jump Start & Battery Replacement
• Breakdown Tow
• Keys Locked & Lost Support
• Wrong Fuel Assistance
• Car tyre Services
• And more!

Please note that some exclusions apply, such as unattended vehicles, towed vehicles such as boats, trailers or caravans, vehicles bogged down on non-public roads, or any vehicle exceeding 3.5 tonnes.

Roadside Assist is only intended for breakdowns, lost keys, and similar issues. Don’t use this service if you’ve had an accident.

How to Add Roadside Assist Cover

Whether you’re an existing customer or new to Initio, adding Roadside Assist Cover is a breeze. Roadside Assist can be added to your policy (full cover only) for a nominal fee, the details of which will be visible once you include it in your coverage. Here’s how:

For Existing Initio Customers:

• Log into your Initio dashboard.
• Find your vehicle policy section.
• Modify your policy to include Roadside Assist.
• Confirm the addition, and you’re all set!

For New Customers:

New to Initio? No worries! Simply add Roadside Assist to your vehicle policy as you set up your account with us.

Please note:

1. Vehicle cover through initio must be paired with other insurance policies and cannot be purchased as a stand-alone option.
2.  Roadside Assist is only available with full cover vehicle cover.

Emergency Assistance

Now help is just a few taps away. If you’ve purchased the new Roadside Assist Online service, getting back on the road has never been easier:

Roadside Assist Online

If you are in an emergency and need immediate help, you can also call the 24/7 helpline 0800 694 555.

What about in the case of an accident?

• Always inquire about the well-being of everyone involved.
• Arrange a tow ASAP, the tow is covered under your vehicle policy if you have full cover on the damaged vehicle.
• Advise the police within 24 hours if anyone is injured.
• If no injury, you must give your name and address to any Third Party (and collect theirs). Inform the police within 48 hours if you cannot find the Third Party.
• If an animal is injured, advise the owner or call the SPCA on 0800 447 722.

Lodge your claim online to get a claim underway, or call us on 0800 763 929 if you need urgent assistance in relation to a vehicle collision.

Accommodation, Repatriation, Taxis:

Please be aware that these services are not included in your roadside assistance package; however, they may be covered under the terms of your specific vehicle policy.

You can find more information about all of our policy wordings here

Your safety is our priority. Keep this page handy for any roadside emergencies, and know that Initio is always here to help!

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It can be common to claim for fallen trees and branches after a severe weather event, for the damage caused to houses and guttering, fences, cars and neighbouring properties.

In general, a home insurance policy doesn’t cover trees themselves; but you may be covered if a fallen tree has damaged your insured structures (cars, buildings, fences, special/recreational features) within the boundaries of your home. In these situations, we’ll cover the costs to remove the sections of the tree required to enable safe repairs – and you’ll need to arrange the tree’s disposal.

Some common examples;

1. A tree has fallen and damaged your car or living room

If the fallen tree has damaged your insured property, we’ll cover the cost of repairing the damage as part of your claim, including removing specific sections of the tree required to enable safe repairs. The insured is responsible for arranging and paying for the tree’s disposal.

2. A tree has fallen over on the lawn or driveway

If the tree has not caused damage, cover for the cost of cutting up or disposing of the tree does not apply.

3. A tree has partly fallen against my house, but it hasn’t caused any damage – am I covered?

If there is no damage to the house, then the cost of removing the tree is not covered. You should take reasonable steps to remove the tree to protect your property and prevent future damage. If you discover damage after removing the tree, then please let us know.

4. My tree has fallen onto my neighbour’s property – am I liable?

A homeowner will generally not be held liable for damage that their trees cause to other people’s property in a severe weather event. However, if it can be proven that they were negligent in not removing rotten trees or had ignored requests for removal, then they may be held liable.

5. Tree roots have grown and caused the underground pipes to block – is the removal of tree roots covered?

Our automatic additional benefit ‘water or sewage pipe blockage’, will pay a limited annual amount toward unblocking pipes. But, the cost to remove the tree roots is not covered.

Tips for tree maintenance

Got a tree or two around your property? Taking care of them is one way to reduce the risks of damage when bad weather strikes. Here’s the lowdown on how you can keep them in tip-top shape:

1. Give ’em a good look: Assess the trees around your place before and after severe weather. Spot anything weakened or damaged? They might need a trim or even removal.
2. Chat with the Council: Check with your local council about the rules for chopping, pruning, or trimming a tree on your, your neighbour’s, or council land. And don’t forget to see if the tree has any special protection.
3. Spotted something? Speak up! If you notice a problem with a tree on council property, don’t be shy. Report it to your council pronto.
4. Know your limits: Trimming a branch is one thing; taking on a big project that could damage a house or hurt someone is another. For the bigger stuff, it might be best to bring in a professional arborist.
5. Think before you plant: Before you get that tree in the ground, think about how it’ll grow. Steer clear of planting large-growing trees too close to your house or other property. Know how your trees will grow above and below the ground before you plant them, and avoid placing ones that will grow large and too close to your house and other property.

For more information, please refer to your full policy

MORE ON THIS TOPIC

• Claims – what is and isn’t covered? 
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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

Liability cover in house and contents insurance protects you if you are legally responsible for accidentally injuring someone or damaging their property. In New Zealand, house insurance is not just about covering fire, natural disasters, or theft. The liability section can help pay legal costs and compensation if a claim is made against you. Understanding how liability cover works, what it includes, and when it applies can help you avoid significant out-of-pocket expenses.

Key takeaways in this article:

• Liability cover in house and contents insurance protects you if you are legally responsible for accidental injury or property damage.

• It can cover compensation payments and legal defence costs if a claim is made against you.

• Cover can apply at your home and, in some situations, anywhere in New Zealand.

• ACC covers medical treatment for injuries, but liability insurance may respond to other related claims.

• Liability cover is automatically included in initio house and contents insurance policies.

What is liability cover in home insurance?

Liability insurance covers legal costs and compensation if you are legally liable for unintentional damage to another person’s property or for injuries they sustain due to your actions or negligence. It typically includes:

• Personal liability: If someone is injured at your home and you are responsible.
• Property damage liability: If you accidentally damage someone else’s property.
• Legal defence costs: If a claim is made against you, your policy may also cover legal expenses.

When might you need liability cover? Here are some common scenarios:

1. A visitor is injured on your property

If a guest trips over a loose step, slips on a wet floor, or is injured by a falling object in your home, they may seek compensation from you.  The New Zealand ACC scheme typically covers injury-related costs, but it has gaps, such as claims for pain and suffering, property damage (e.g., clothing or personal items), and mental injury. In these cases, your home insurance liability cover may help with costs and legal fees if legal action is taken.

2. Your tree falls on a neighbour’s property

New Zealand’s strong winds and storms can cause trees to fall. If a tree from your property damages your neighbour’s home, car, or fence, you could be held responsible if you failed to take reasonable care. 

3. Your kids or pets cause damage

If your child accidentally kicks a ball through a neighbour’s window or your dog escapes and damages someone else’s garden, liability cover can help pay for repairs or compensation.  

4. You run into a vehicle while riding your bicycle

If you cause damage to other vehicles or property whilst navigating the streets on your bike, liability cover will cover those costs.  

5. Water damage to a neighbour’s property

If a plumbing issue in your home causes water to leak into the adjoining unit or property, damaging walls, floors, or belongings, you may be liable for the cost of repairs.

6. You accidentally cause a fire that spreads

Fires can quickly get out of control, whether from a kitchen accident, an unattended candle, or a backyard BBQ. If a fire originating from your home spreads to neighbouring properties – damaging fences, homes, or belongings – you could be held responsible. If a neighbour makes a claim against you for repair costs or compensation, your liability cover may help cover the expenses, especially if negligence is a factor.

7. You accidentally cause damage while staying elsewhere

You’re visiting a friend’s house, and you accidentally knock over an expensive vase or damage a piece of furniture. Or, while browsing in a shop, you accidentally break a fragile item. You might be charged for the damage, but your liability cover may help cover the cost.

What’s typically not covered under the Home/Contents liability section?

While liability insurance provides broad protection, there are exclusions, such as:

• Intentional damage: If you deliberately cause damage, you won’t be covered.
• Business-related liability: If the incident occurs as part of a business activity, you would need separate business liability insurance.
• Liability due to unlawful activities: Any damage or injury resulting from illegal activities is not covered.
• Liability due to operating a motor vehicle (is covered under the vehicle’s insurance)

Conclusion

The liability section of a home insurance policy in New Zealand is crucial for protecting you from unexpected legal and financial consequences. Whether it’s accidental property damage, injury that falls outside ACC cover, or an unforeseen incident, this cover ensures you won’t face costly legal battles or compensation claims out of pocket.

All initio products automatically include liability protection.

You might also be interested in:

• How do I buy my first policy with initio?
• What is initio and how does it work?
• Why do I need house insurance?