Insurance Type and Cost Changes

[Maccachic]

Thought this was common knowledge? Was all over the telly and packs sent out from insurance companies.

To be honest those calculators are not great. http://www.prendos.co.nz/replacement...rance-policies

[essence]

Yes, it might have been.

But how many people actually read the packs sent out to them? Or actually "tune in" to the TV.

Believe me, people will get caught out.

[speights boy]

Maccachic
On the cost of insurance thread last month we were discussing averaging and co-risk on a partial loss.
Did you ever get around to asking your insurer about this ?

[north shore]

macchic, every time I see you post the prendos link and I click on it, its gone up in price!!!!! I got a quote in early June this year the cost was $225 +gst, decided to wait until the reno was complete. I noticed it had gone up again recently, I just clicked on your link again now and the same one has risen again, now starts at $400 + gst.

[Leftette]

essence - there's been a massive media campaign on this issue. People may be caught out, but with the extent of the advertising, I'm pretty sure ignorance won't be an acceptable excuse.

[Maccachic]

Maccachic
On the cost of insurance thread last month we were discussing averaging and co-risk on a partial loss.
Did you ever get around to asking your insurer about this ?

It wasn't in there must have dreamt it and I haven't got round to calling them as I have a fair bit of stuff going on and my renewal is a while away, but someone posted legislation in regards to averaging so looked like this wasn't an issue.

[Maccachic]

macchic, every time I see you post the prendos link and I click on it, its gone up in price!!!!! I got a quote in early June this year the cost was $225 +gst, decided to wait until the reno was complete. I noticed it had gone up again recently, I just clicked on your link again now and the same one has risen again, now starts at $400 + gst.

Not sure it was ever that cheap but yes it has been increased due to the time it takes to carry these out.

[Wayne]

They are arbitrarily changing the policies from "actual replacement" to "sum insured replacement", the amount the insurance company says your house is worth. What this means is -

Are you just writing for the sake of writing? As has been said since this is mentioned all over the place and is really hard to miss - unless you live in a cave.

I have been quite impressed by the level of detail they have gone in trying to explain what is happening - with the info pack they give. My insurance send out a pack before renewal time telling me that at renewal time I will have decisions to make. And then another lot of info at renewal.

People will get caught out and bleat but some people just can be helped - no matter what! And we let them vote, let alone breath.

[Nice]

Time for a bit of a saga on this, perhaps for those who haven't acted on this well publicized change yet . . . .

Under the new regime, Tower indicated at $2,000 per sq m that they would cover me for $420k. Web site when I entered all the detail gave me about $650k. I paid the money for a proper insurance valuation from a professional, and the rebuild cost is expected to be $1.1m

I became concerned at what that would do to my premiums, so bravely called Tower to discuss.

Increase of $440pa, was previously paying about $1,150pa. I was about to accept this, when the call centre person suggested reviewing other policy details, and made the suggestion that I increase the quite low $150 excess to $500. Overall result was a $7 per month increase in premiums to get almost 3 x the cover !!

This is for a biggish old 2 story character house on a hill with walk up access; but not anything that flash !

[imd6662]

More to the point, owners face a real challenge in making good decisions about cover. The on-line calculators such as IAG's "need to know" seem to be potentially quite inaccurate, and that's hardly surprising given wildly differing opinions about construction costs and continuing unpredictable price increases. This means you are faced with the choice of either making a semi-educated guess at an adequate cover amount, or seeking expert advice. Enter services ranging from those like Prendos, deriving from the valuation end of the scale but switching the emphasis from market value to replacement cost, through to the newly proliferating "total sum insured" businesses (including the inevitable new franchieses -- ("JIm's valuations" anyone). Preusmably though, if you choose to invest hundreds of dollars in such an opinion, it needs to provide you with something that can be and is regulalrly updated to reflect changing costs.

[Wayne]

a change in excess often makes a huge differance to premium

[speights boy]

I was about to accept this, when the call centre person suggested reviewing other policy details, and made the suggestion that I increase the quite low $150 excess to $500. Overall result was a $7 per month increase in premiums to get almost 3 x the cover !!

Precisely.
I have always opted for a very high excess in return lower premiums.
Have certainly been on the winning side of that equation so far.

[Wayne]

Yes - I have enough wealth to cover me for the little stuff - it is the big stuff that would screw me so I insure.

[imd6662]

.. Tower indicated at $2,000 per sq m that they would cover me for $420k. ... rebuild cost is expected to be $1.1m
....

Increase of $440pa, was previously paying about $1,150pa. ... increase the quite low $150 excess to $500. Overall result was a $7 per month increase in premiums to get almost 3 x the cover !!

.... interesting example..... so am I correct in saying that Tower were offering $420k of cover for $1,150, and $1.1M cover for only $1,590, reduced to only $1,234 for 1.1M cover with $500 excess? ... That actually sounds quite reasonable in any combination. What part of the country? Is this your own home or a rental?

[Nice]

.... interesting example..... so am I correct in saying that Tower were offering $420k of cover for $1,150, and $1.1M cover for only $1,590, reduced to only $1,234 for 1.1M cover with $500 excess? ... That actually sounds quite reasonable in any combination. What part of the country? Is this your own home or a rental?

Yes, that is pretty much the figures they quoted. I thought it was pretty reasonable too !

However, now that I have today received my policy documents, I find it is even better, in that the monthly premium after the changes have been made are only $72.36, or $868.32 per year !!

Yes, this one is my own house, not a rental, and in the earthquake prone Wellington City (or so they have been telling us for decades anyway)