Underinsurance in New Zealand is becoming a concerning trend, with more Kiwis opting out of the financial protection of insurance due to perceived high costs. As cost-of-living pressures continue to impact budgets, many households are being forced to choose between everyday expenses, like food, rent or mortgage, and insurance cover, because of affordability. Even in these challenging financial conditions however, the importance of maintaining adequate insurance cover cannot be overstated.

A Growing Concern of Underinsurance

Data from a recent Consumer NZ survey paints a gloomy picture of the state of insurance affordability in New Zealand. Over the past decade, house insurance premiums have skyrocketed by an alarming 97 per cent, while contents insurance premiums have seen a substantial 48 per cent rise. Wellington and Auckland have been particularly hard-hit, experiencing a 29 per cent and a 26 per cent rise respectively.

Several factors have contributed to the surge in insurance premiums, including the escalating cost of reinsurance, the impact of severe and frequent weather events, and the adoption of risk-based pricing for individual properties. As a result, homeowners across the country are grappling with finding the right balance between essential insurance cover and rising costs.

Strategic Measures to Address Rising Premiums

When it comes to addressing the issue of rising insurance premiums, there are some strategies that can help:

• Increasing your excess on insurance policies can help reduce the cost of your premiums, but it’s important to ensure the excess amount is still manageable in the event of a claim.
• Instead of cancelling your insurance entirely, work with an insurance adviser to evaluate your coverage needs and opt for more limited policies which still offer essential protection but at a more affordable price.
• Explore any discounts and incentives offered by insurance providers when bundling insurance policies, maintaining a claim-free history, installing security systems, or opting to pay premiums annually instead of monthly.

Get Expert Advice From an Insurance Adviser

Another important way to address concerns around rising costs of insurance is to work with an insurance adviser, such as those at Mortgage Express. An insurance adviser can assess your current coverage and look at alternative options that may offer you cost savings without compromising on essential cover.

During an insurance review, an insurance adviser can:

• Evaluate your existing insurance policies.
• Identify any gaps in coverage where you may be underinsured.
• Recommend alternative solutions to fit your individual needs and budget.
• Provide peace of mind knowing that your insurance cover is robust and aligned with your financial goals.

Prioritising Insurance is Essential

Despite the rising cost of living in New Zealand, insurance cover remains an essential part of protecting your most valuable assets. Whether that’s your home, the things you own, or yourself, proactively reviewing your insurance cover can help mitigate the impact of rising costs.

To find out more about insurance for your home, contents, car or life, get in touch with Mortgage Express today, and connect with an insurance adviser near you. Get advice and guidance around finding the right level and type of insurance cover to safeguard the things you love.