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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?

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

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

If you have insurance on your house, you most likely have cover for fires. Unlike some countries, New Zealand house insurance policies automatically cover fires.

However, just to be sure you should check your policy wording to see if fire damage is not excluded. All of the initio house insurance policies automatically cover fires up to the replacement sum insured you select for your house.

Why is fire cover important?

Having fire cover for your home is essential. Fire damage makes up a large amount of house insurance payouts. Even a small fire that does not burn the entire house can mean it is a total loss. Smoke contamination and water damage (from the fire brigade) often means homes can’t be lived in and are a total loss.

The general risk of fires means it’s generally standard for cover to be included in insurance policies.

Kiwis are good at getting insurance

New Zealand has one of the best rates of insurance coverage in the world.  We are 4th in the global rankings of insurance penetration. This means that, as homeowners, we see the value in insurance and compared to other countries we choose to insure our houses (and other assets) more often.

Following the Christchurch earthquakes, almost every insurer changed from insuring houses for full replacement based on size (e.g. 150 square meters) to insuring the house for a specified replacement sum insured.  This put the onus on the homeowner to choose a sum insured that reflected the replacement value of their home – and this in itself is a complex exercise.  This resulted in the homeowner having a house insurance policy in place for less than it would actually cost to rebuild the house.

So, what is the rebuild value of a house?

Many homeowners confuse the rebuild value of their home or rental property with its market value.  These are two very different things and are completely unrelated.   The market value is what a property would sell for in the current market, whereas a rebuild value is a cost to replace the house and its site improvements.

Given that fire generally results in a total loss to the house, getting the rebuild value correct, and aligning this with your insurance is essential.  It is also important to factor in the cost of demolishing the home and preparing the site, the clean-up costs after a fire cost at least $40,000 (even more if there is asbestos).  Learn more about calculating your replacement value here.

Causes of house fires

The most common causes of a house fire are:

1.  Electrical fault
2.  Electronic equipment
3.  Cooking fires
4.  Fireplaces

Many fires can be prevented, or at least brought under control early if a fire extinguisher was available.  Unfortunately, unlike fire alarms, extinguishers are not mandatory.

What about older homes, do they burn down more often?

The earliest wiring in New Zealand was cloth-wrapped rubber insulated in metal conduit. It was designed for a very small number of power outlets. In the 1930’s rubber wrapped wiring (with an earth wire) was used without conduit. This wiring deteriorated as the rubber insulation perished and became brittle.   Many homes would have been rewired in the 1950’s and 1960’s with PVC or early versions of TPS wiring. This is also known to deteriorate over time, and wasn’t designed to be covered by insulation.  This is why older homes have a higher incidence of fire than new houses.

Homes today have more lights, electronics, gadgets, and appliances (including some that are permanently on standby) than anyone from the 1900’s could ever have imagined. The original wiring was not designed to handle this load and was not built to last.

Fire levies, how does that work?

The New Zealand Fire and Emergency Service is funded almost entirely by the levies included as part of asset insurance.  This money funds the fire stations, the employees, and the fire appliances that respond to house fires.  House insurance includes a levy of $146 inc gst per living unit.   Your insurer will collect this levy as part of your insurance cost and will then pass this on to Fire and Emergency Services on your behalf.  It is important to note that the fire service does not discriminate between payers and non-payers (insured and uninsured)  – meaning that if your house is on fire and you are not insured the fire service will still turn up and get your house fire under control.

How long does it take to rebuild a fire damaged house?

Do not underestimate the amount of time it takes to rebuild after a fire.  You will be waiting for at least 3 months for fire investigators, assessors, engineers, builders and environmental consultants to complete their reporting. and cost estimation.  If your house is suspected to have Asbestos then the process will take even longer while professionals confirm that the property is safe.

The next step is compliance which means delays on consents with council – adding further time to the process.  It could take as long as 6 months before re-construction starts, and depending on the complexity of the build at least 4 months of construction through to completion.

If you are a landlord it is important that your landlord insurance policy has loss of rents cover – which will compensate you for the fact that the tenant has left the property and is no longer paying rent – this could be important if you have a mortgage on the property.

If it is your own home that has been fire damaged and cannot be lived in (which is almost a certainty after a fire) then you will be wanting your home insurance policy to have an alternative accommodation clause; meaning the insurer will pay the costs of your renting another property while your home is being rebuilt.

Tips for making sure you will survive a fire loss to your house:

• Do not under-estimate the cost of fire damage
• Work out the re-build value of your home and update your insurance policy.   There are tools to help you calculate this value
• Fire damaged houses take a long time to rebuild – make sure your house insurance policy allows for this.

Learn more about the different types of house insurance:

Landlord insurance – all in one house and landlord insurance, including loss of rents, malicious damage & more.
Multi unit insurance – for serious landlords with multiple units under the same roof.
Holiday home insurance – for the bach and for holiday homes that are also rented out (eg Bookabach, AirBnB)
House insurance – for your own home, and contents.

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.  

Related Articles:

• Take the house flip insurance quiz
• Are Renovations or Extensions to my home covered?
• House flip insurance
• What is covered by a house flip insurance policy?

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

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?

As you pay for your insurance you might wonder where your premium is going? And how is it calculated? This guide explains what makes up the cost of house insurance and how it’s calculated.

Insurer Premium

This is the insurers cut of the pie and is what the insurer receives in compensation for taking on the risk that you don’t want to carry yourself.  This is the variable component of the overall premium which will be higher for riskier properties and lower for a less risky property.

For example, a premium comparison between a landlord insurance policy for a rental property located in Auckland and one located in Christchurch will show a significant difference in premium.  This difference in premium is due to the risk exposure to earthquakes. However, there are many factors that determine the premium of your property – such as the relative exposure to weather events, flood zones, vulnerability to theft and the historical record of claims in the area.  

In short, insurers use the following factors to calculate what premium they want for the risk.

a) Location of your property

The cost of your insurance is mostly based on how likely it is that your area will have an earthquake or storm. Some places are more at risk than others because of past claims. Nowadays, many insurance providers use “risk-based pricing.” This means areas with less risk, like Hamilton, no longer help cover the cost for higher-risk areas like Napier.

b) Water supply or distance to fire station

The closer a house is to a fire station and the better the access a property has to water, the less likely it is to burn to the ground. For example, a rental property immediately next to a fire station will have a lower premium than a rental property that’s 30 minutes out of town and has rainwater tanks for its only form of water.  

c) Age of the property

Houses built prior to the 1940’s are more likely to have older building materials and methods. A common cause of damage are electrical fires caused by old and corroding wiring. Water damage from by old pipes failing under increased town water pressure is also common. Learn more about insuring older homes here.

There are also certain decades where the New Zealand construction industry (and the Government) allowed the use of certain plumbing products and cladding systems that continue to be a source of significant property damage. Houses built in the 1980’s are most likely to be constructed with Dux Quest piping and fittings. Quest was taken off the market in the late 1980s but there are still a number of houses suffering water damage from poor performance of water pipes and fittings.  

d) Use of the property

This one goes to human nature. It’s a fact that people take better care of things they own. This means that houses occupied by their owners have few losses than those occupied by tenants or short staying guests. A rental property attracts landlord risk (such as malicious damage and loss of rents) so a landlord insurance policy will cost you more than the insurance cost for your own home.  

Holiday homes are often empty for longer periods of time. This can make water damage more expensive to fix. There’s also a higher chance of break-ins and burglary.

e) Replacement value of the property

The more your house is worth, the more you’ll pay for insurance. But it’s not as simple as saying a $1,500,000 house costs twice as much to insure as a $750,000 one. After a certain point, the cost of insurance goes up more slowly. This is because most insurance claims are for small things, like a leaking pipe, rather than big things like a house fire.

f) Excess and extras

An excess is the amount you’re willing to pay when you make a claim. The more you agree to pay, the less risk for the insurance provider, especially for small, frequent claims.

Adding extra types of cover can also make your premium go up. For example, if you decide to increase your ‘loss of rents’ cover, you’ll pay more.

Government Earthquake Levies

Your insurance cost includes a government earthquake levy. This money goes to the New Zealand Natural Disaster Fund. It covers natural disasters, like earthquakes, up to $345,000 including GST. Since October 1, 2022, this levy has gone up to $552 including GST for each home covered by your insurance each year.

If an earthquake happens, the first $345,000 of damage is paid for by the Earthquake Commission. Any amount over that is covered by your insurance provider. We collect this levy as part of your total insurance cost and give it to the Earthquake Commission.

Government Fire Service Levies

Your insurance also includes a fire and emergency service levy. This helps pay for emergency services like fire brigades and ambulances that benefit everyone in New Zealand.

This levy is $106 + GST for each living unit, and an extra $21.20 + GST if you also have cover for contents. Like the earthquake levy, we collect this money as part of your total insurance cost and give it to the Government. Even if you choose not to have home insurance, you’ll still benefit from these services.

Goods & Services Tax

Like all domestic goods and services in New Zealand, a 15% GST tax is then applied to the total insurance cost (insurer premium, NHC (was EQC) levy, and FSL levy). The total of all four of these makes up the total premium payable by you, the insurance customer.  

As a practical example, a single unit landlord insurance policy with a total annual insurance cost of $1,000 including GST consists of 55% government levies and GST.

Where can I find the breakdown?

On our quotations and options of renewal, you can find the breakdown immediately below the monthly and yearly total cost figures.  If you hover over the coloured bar, the system will display each relevant amount.  Once you purchase a policy a receipted Tax Invoice will be emailed to you which outlines the full breakdown.  Historical Tax Invoices can also be downloaded from your initio dashboard at anytime.

This guide has been produced to provide more transparency on how insurance premiums are calculated.  Much of the way the insurance industry operates is a ‘black box’ of jargon – but when it comes to something so important as the cost of house insurance it shouldn’t be complicated. 

USEFUL ARTICLES

• Why has my premium changed?
• Why does my rebuild value change?
• Why do premiums increase?
• Why do you need house insurance?
• How to set up an account with a visa debit card

Here’s what you need to know to insure your main home if it’s also rented to short-term guests.

What can be covered? A shared primary residence

If the house is your primary residence, we can cover your own home that’s also rented with our Own Home Rented product. However, it’s required that you share the use of the property with guests.

The two most common scenarios for renting your own home are:

1.  You rent out part of your home to short stay guests while you still live in the property (e.g. a room or downstairs).
2.  You rent out you whole house to short stay guests when you’re not living there (e.g. you go overseas or stay in your holiday home).

If your house is not your primary residence, it may be able to be insured as a Holiday Home also Rented. Learn more about insuring holiday home rentals here.

Essentially, our guest rental cover only applies to properties that have shared use (at-least occasionally) by the owner. We’ll explain why next.

What can’t be covered? A dedicated short-stay accommodation

We can’t insure a dedicated short-stay living unit that’s only used for guest accommodation. When a unit is used solely for guests it becomes a commercial property – similar to a motel.

The EQC’s $150,000 of natural disaster cover will not apply to a ‘dedicated short stay’ as they are considered commercial risks. Our domestic house insurance policy assumes part of the natural disaster risk is covered by the EQC. A dedicated short stay rental therefore needs to be covered under a commercial material damage policy, where the insurer covers 100% of the natural disaster risk.

Please note the definition of a dedicated short stay property is any living unit that is set up purely as a commercial enterprise and the owners don’t use it or intend to use it for their own purposes (or for somebody else to use it as their home).  

Is a secondary unit at my house covered under my house insurance policy?

Yes, as long as it’s not a dedicated short stay unit – and it’s used by yourself (at least occasionally) as part of your own home.

It’s common for people to have an additional self contained living units at their houses. It’s common to have a separate unit at the back of the house, or a downstairs living unit with its own access. Often these are rented to short term guests (via Airbnb or BookaBach), or longer term boarders for additional income.

If you don’t use this unit yourself (at least occasionally) then we can’t insure it together with the main house.

If the unit is used purely for short terms guests a commercial policy is required. If the unit is simply rented to tenants you’ll need a separate landlord insurance policy for it.

Short Stay Airbnb Unit Example

If the additional unit is used by both the owner and short-term guests we can provide cover under our own home rented.

If the additional unit’s use is shared by the owner (themselves or family) as well as short-stay guests, it can be covered under our Own Home Rented product.

When the living unit is solely rented to guests and not utilised by the owner,  it is deemed a dedicated short stay. EQC cover does not apply, and we can’t provide cover.

An example of this is where the unit is used for children when they return home from university and other times the unit is rented to short stay guests. This can be insured under a Own Home Rented policy on the main house.

Renters or Boarders Unit Example

If the rental unit (for example downstairs unit) is only used for a longer term tenants (i.e. more than 90 days) or boarders and not utilised by the owner themselves – this can’t be insured under a single Own Home Rented policy. In this instance, a separate Landlord Insurance policy is required to cover the self-contained rental unit.

If you need help working out which insurance or combination of insurance is best for you, see our home & income insurance page.

What is Covered?

Our Own Home Rented product takes all of the standard owner occupied policy features, and includes extra cover for the risks of renting. You can also choose to add personal household contents cover. You can get the peace of mind that your property and contents itself is covered, while the risks associated with renting your house to guests is insured.

Generally a standard house insurance policy won’t cover guest risks, so it’s important for owners to get the right cover. The extras included in the own home rented cover includes:

• Accidental or intentional damage by guests
• Theft by guests
• Loss of rent following damage
• Owners liability cover

Learn more about what the Own Home Rented policy covers.

What happens if my house is too damaged and can’t be lived in?

If your house is too damaged to be lived in (like a fire or flood) there is cover (up to $20,000) to go towards moving into a temporary house while repairs are completed. If you also get regular rental income from guests there is cover for your lost rents you would otherwise have got if your house wasn’t damaged.

We provide $20,000 of loss of rents cover for free, with options to increase to $40,000 or $80,000. Both loss of rents and alternative accommodation have a payout period of 12 months.

The Loss of Rent calculation will take account of future actual guest bookings that are cancelled, and expected bookings based on the same period in the previous year. If you are new to the home and income game then we will use short-stay occupancy rates in that particular region to estimate the loss. If you have a boarder or tenant with a fixed weekly rent then that amount will be used.

The policy aims to put the owner in the same financial position they were in before the loss, by paying for the repair costs and lost rental income – all while paying for the owners temporary accommodation costs.

Home and Income Insurance

If you own a property with two dwellings and rent them both out long-term (90 days or more per tenant), it’s important to have the right insurance to protect your investment. Whether the dwellings are separate or physically connected will determine the type of insurance you need.

What type of rental arrangement is this?

• Two homes, same site
• Both rented on long-term residential leases

What insurance do you need?

The right insurance depends on whether the dwellings are physically connected or separate:

If the dwellings are NOT physically connected (e.g., separate buildings on the same section):

• You’ll need two landlord insurance policies, one for each self-contained dwelling. Each policy will cover the specific rental risks of that property, including tenant-related damage, liability, and loss of rent.

Start by buying one landlord insurance policy, then add a second through your dashboard (instructions below)

Buy Landlord Insurance

If the dwellings ARE physically connected (e.g., one upstairs and one downstairs, or connected by a wall, roof, or garage):

• You can use our Multi-Unit Rental policy, which provides coverage for both units under a single policy. you’ll need to state the number of self-contained dwellings at the address. This helps ensure you get the right level of cover for your property setup. 

Buy Multi-unit Insurance

How to add a policy for a second dwelling on the same title:

1. Login to your dashboard and click on the ‘house insurance +’ button

2. Search for your home address & ‘see full quote’

   

3. On the full quote screen, click ‘back’ to edit the second dwelling’s details if needed.

   

   • If both properties are the same size or the details are already correct, no changes needed.

4. Once you go back, edit the property details, then click ‘continue’

   • This will adjust the quote to reflect the correct figures for the property.

Finish the quoting process from here per the usual process – Easy!

You can get a quick quote and buy insurance online in just a few minutes with initio. Make sure you choose the right policy based on whether your dwellings are separate or connected. 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.

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 part of your home short-term
• 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

Living near the coast has a lot going for it. Sea views, beach access and a relaxed lifestyle are a big drawcard. But coastal properties can also come with additional risks, which means house insurance is often one of the first questions buyers ask.

If you are buying, owning, or thinking about selling a coastal property, it helps to understand how insurers assess risk, and how to navigate coastal risks with confidence.

Key things you’ll learn in this article:

• Whether coastal properties can be insured, and what insurers assess
• How flooding, erosion and subsidence affect insurance decisions
• Why some coastal homes require a customised solution
• What long-term insurability could mean for owners and buyers
• How to check if your property can be insured

Can I insure a coastal property right now?

In many cases, yes. Being close to the coast does not automatically make a property uninsurable.

Initio can insure a wide range of coastal properties, provided the risk profile meets our underwriting criteria at the time cover is considered. When assessing a coastal home, we look at factors such as:

• proximity to the coastline or waterways
• flood history or flood modelling for the area
• exposure to coastal erosion
• land stability, subsidence and coastal erosion risk
• local hazard maps and council information
• previous claims or known damage

You can obtain a quote online using the information available at the time and the details you disclose as part of the application. Depending on those details, the application may be able to be confirmed straight away, or it may be referred to our underwriting team for review before cover is confirmed.

In some situations, we may not be able to offer cover through our online model. This does not necessarily mean the property is uninsurable, but rather that it may require a more customised insurance approach that sits outside what initio is able to provide.

Does initio have concerns about erosion, flooding or subsidence?

These are some of the key risks we assess for coastal properties.

Flooding

Flooding is one of the most common risks for coastal homes, particularly where properties are close to estuaries, rivers, low-lying land, or stormwater outlets. Heavy rainfall, storm surge and rising sea levels can all increase flood risk over time. In some coastal areas, king tides can also contribute to higher water levels, particularly when they coincide with storm events. 

Learn more about flood risks and zones, and natural hazard cover.

Coastal erosion

Coastal erosion can occur gradually over many years, or suddenly during severe weather events. Properties built close to cliffs, dunes, or unstable shorelines can be more exposed to this risk.

Subsidence, land movement and coastal erosion

Coastal land can sometimes be affected by subsidence, erosion, or other forms of land movement, particularly where soils are soft, saturated, or influenced by changing groundwater or coastal conditions.

Subsidence and coastal erosion themselves are not covered under most house insurance policies. However, evidence of either can increase the likelihood of other insured events. For example, land that has experienced erosion or subsidence may be more susceptible to landslip or slope failure during large weather events, which can be covered under a house policy.

For this reason, insurers consider subsidence, land movement and coastal erosion together when assessing the overall risk profile of a property.

These factors do not automatically make a property uninsurable, but they do influence how insurers assess cover, pricing and long-term sustainability.

Why some coastal properties need a customised insurance solution

Initio is an online insurance provider. Our policies, pricing and underwriting are designed to work efficiently for a wide range of homes without the need for one-off or bespoke policy structures.

For most properties, this allows us to offer fast quotes, clear cover and easy ongoing management. However, some coastal properties have risk profiles that sit outside what can be supported through a standard online insurance model.

This can occur where a property has one or more higher or more complex risks, such as:

• significant exposure to coastal erosion
• repeated or severe flooding history
• known land instability or subsidence
• reliance on ongoing protective or mitigation works
• access challenges that affect emergency response or repairs

Where a property has these characteristics, it may require a customised insurance solution tailored specifically to its risks.

Unfortunately, as an online insurance provider, initio is unable to offer customised or bespoke insurance solutions. This does not reflect the quality or care of the property itself, but rather the way certain risks need to be assessed and managed.

Our focus is on being upfront, consistent and clear, so customers can understand their options and navigate coastal risks with clarity. 

See what’s included by reading our policy wordings.

What does this mean for long-term insurability?

Insurance decisions are based on the best information available at the time, including hazard modelling, claims experience and climate data. As this information evolves, insurance settings can evolve too.

For many coastal properties, any changes tend to happen gradually rather than all at once. Over time, this might mean things like:

• premiums adjusting as risk profiles change
• excesses being updated for certain types of events
• small changes to policy terms
• fewer insurers offering cover in higher-risk areas

If a property already needs a more customised insurance approach today, it can be a sign that the risk profile is more complex than average. This does not mean insurance will suddenly become unavailable, but it is something buyers and owners may want to keep in mind as part of longer-term planning.

Learn more about complex insurance quotes

Could this affect resale value?

For some buyers, insurance is becoming another factor they consider alongside location, price and future maintenance.

If a property is more expensive or complex to insure, that may influence how some buyers assess value. That said, many coastal homes remain highly desirable, and insurance is just one piece of the overall picture.

Thinking ahead about insurability, maintenance and risk mitigation can help support both ongoing cover and future resale appeal. If you are purchasing at auction or under conditional agreement, our guide on obtaining a letter of intent explains how to confirm cover during the buying process.

Things to consider when buying or owning coastal property

If you are considering a coastal home, it can help to:

• check council hazard maps and LIM reports
• understand past flooding, erosion or land movement in the area
• ask about previous insurance claims
• consider how close the home is to the shoreline or waterways
• think about any risk mitigation already in place

These steps can help you better understand both current and future insurance implications.

How to check if your property can be insured

The best place to start is with a quote, or by obtaining a letter of intent.

If it is referred for review, our team will assess the details provided and explain the outcome, so you can decide on your next steps with clarity. When requesting a letter of intent, it is important to disclose all relevant information you are aware of as part of your due diligence, such as flood zoning, coastal erosion exposure, land stability concerns or council hazard classifications.

Insurance does not have to be hard, even when you are navigating coastal risks.

You might also be interested in:

• Five tips to insuring in a flood zone
• There’s been a natural disaster, what happens next?
• Am I covered for natural disasters?
• Confirm you can obtain insurance before you make an offer
• How do I make an insurance claim?
• One insurer, one headache

External resources

• Searise maps
• Natural Hazards regional maps
• Auckland Council Flood viewer map

Written by Toby Pudney – initio’s support team lead.

Toby has been with initio since 2023 with 6 years of experience in the insurance industry. Credentials: ANZIIF New Zealand Compliance for Advisers (General Insurance Broking)

or a full-blown rebuild?

So, you’ve bought a do-up. You’ve watched the videos, binge-scrolled the before-and-afters, and maybe even recruited your dad for “a quick paint job” that’s already turned into three weekends and a strained hamstring.

But before you swing that sledgehammer (or hire someone who will), it’s important to know this:

Initio’s house flip insurance is for light, cosmetic renovations only. If you’re planning structural changes, you’re going to need something stronger than paint, and a different type of insurance

Take our highly scientific quiz to find out whether your reno project is House Flip cover material – or heading straight into contract works territory.

1. You walk into your reno project. What’s your first thought?

A) “Needs a paint, new carpet, maybe swap out the taps.”
B) “Where’s the floor gone?”
C) “This’ll be nice… once it has walls again.”

2. The most powerful tool you’ll be using is:

A) A paintbrush or maybe a multitool if you’re feeling spicy.
B) A power saw, demolition gear, and a hard hat.
C) Your builder’s number on speed dial.

3. You can currently see:

A) A slightly dated 90s kitchen.
B) Sunlight coming through the roof… and the floor.
C) Straight through the house from the front door to the back wall.

4. Would you sleep overnight in the house right now?

A) Yep, just need to bring a mattress.
B) Only if I had a tent.
C) Not unless you paid me and provided a hazmat suit.

5. What’s your builder mate’s reaction when you show them the place?

A) “Easy weekend job, bro.”
B) “Oof… brave.”
C) “This isn’t a reno, it’s an archaeological dig.”

Your results:

Mostly A’s – You’re flipping, not flattening.

✅ You’re doing surface-level, cosmetic renos. That’s exactly what initio’s House Flip cover is for. Paint away.

Mostly B’s or C’s – Sorry, you’ve crossed into structural territory.

🚧 This is no longer a ‘flip’ – it’s a major rebuild, and you’ll need contract works insurance to protect your property properly. Check out our mates at Builtin for that.

Now that you know where you stand…

If you have a home ripe for a bit of a quick freshen-up that’s;

• currently liveable
• structurally sound
• no major unrepaired damage
• no significant outstanding maintenance
• no weathertightness issues

Then it’s likely we can provide cover under Initio’s House Flip policy.  Here’s a quick refresher on what Initio’s House Flip policy does and doesn’t cover:

✅ Covered (short-term cosmetic renovations)

• Painting
• Carpet and flooring
• Replacing kitchens or bathrooms
• Removing non-load bearing walls
• Minor updates that leave the bones of the house alone
• A liveable home from the date of the policy inception, ie must have bathroom, kitchen and sleeping facilities

If your tools fit in a ute tray and your plans fit on a single A4 page, you’re probably sweet.

❌ Not covered (structural renovations)

• Re-roofing
• Extensions
• Recladding
• Replacing or removing load-bearing walls
• Work that requires building consent or council sign-off
• Long term projects

These need a contract works policy, because once you start touching the bones of the house or it’s raincoat, the risk profile changes completely.

We’re not just being picky. Insurance needs to match the level of risk, and a cosmetic tidy-up is a very different beast to a half-demolished house with no roof.

What about insurance while the work is being done?

If the reno is cosmetic only, our House Flip cover gives you short-term insurance for the period of renovation. It covers things like fire, theft, and liability while you’re on site giving the place a facelift.

But if there’s structural work involved, you’ll need to pair your house insurance with a contract works policy. We’ve teamed up with BuiltIn Insurance—NZ’s contract works experts—so you can get sorted online quickly, and keep everything under the same insurer umbrella (IAG).

House flipping is all fun and games until someone removes a load-bearing wall.

Get the right cover for the job – and if you’re still unsure, we’re just a call or click away.

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Other relevant information

• When do I need contract works insurance?
• Are renovations or extensions to my home covered?
• House flip insurance
• What is covered by a house flip insurance policy?