TOWER confirmed today that it would move to Sum Insured house cover, to meet international reinsurance requirements.
TOWER Group Managing Director Rob Flannagan said the decision had been made in light of reinsurers’ new requirements to cap house insurance cover in New Zealand.
Mr Flannagan said a team had been working for the past few months on determining the best option for TOWER customers, with their decision informed by extensive customer research.
“We will be moving away from uncapped Full Replacement house cover and intend to move to Sum Insured house cover, in line with the vast majority of the local industry,” he said.
Mr Flannagan said the timelines for the change to Sum Insured house policies were 31 May 2013 for new business and on renewal for policies expiring in July onwards.
TOWER is still working through the details of the changes that will be announced closer to the changeover date.
“We will be contacting our customers prior to the renewal of their house polices to provide detailed information about the new Sum Insured approach,” he said. “We appreciate that this will be a challenging shift for many of our customers, and will do our best to support them through this significant industry wide change.”
Broadly, Sum Insured requires customers to establish themselves how much it would cost to rebuild their home in the event of a total loss. This Sum Insured figure nominated by the customer will be the maximum amount paid for the house in the event of a claim.