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  • The Cordell calculator uses general building information to estimate your sum insured, based on the information you provide.
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  • If you have received your policy renewal pack and your want to change your sum insured you can complete our online form
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Where to get help 



You’ll need to provide us with your sum insured value when you start a house insurance policy with us and / or at your policy renewal, or at least get yourself comfortable with the default sum insured value that you are provided on renewal, to ensure it’s sufficient for your house.

If you’re unsure what your sum insured value should be, we suggest using the calculator as a guide or getting in touch with a valuation professional.

If you’ve got a question for us, first check out the FAQs provided below or give us a call on 0800 379 372.

Where to get help

Registered valuer

Registered valuers are commonly used in the financial services industry, primarily to provide market valuations to banks. They are also trained to provide insurance valuations for rebuild purposes.

 

To get an insurance valuation for rebuild purposes, a registered valuer will visit your home for a professional fee, and create a valuation based on items such as the property’s size, section slope and materials used.

 

The Property Institute website provides more information on the process of determining an insurance value, and the assurance this will provide you in determining your sum insured.

 

Quantity Surveyor

Quantity Surveyors are engaged in the early stages of construction, and are used to estimate the full cost of a building project. They consider what needs to be done to get the section ready to be built on as well as the materials and the labour required to build the house. They can then go on to manage a project to its completion – making sure the final cost hasn’t varied too much from the initial estimate.  This knowledge and experience allows them to provide rebuild cost estimates on any type of house.
 
A Quantity Surveyor can be engaged to provide you with an insurance valuation for your property. They will visit your home and later provide you with a reinstatement valuation based on their knowledge of market rates and costs as they apply to your home.

Licensed builder

You can also approach a licensed builder to ask if they can provide an insurance valuation for rebuild purposes.
 


Frequently asked questions

Expand the table below to view questions.

House and contents insurance expand this category
House insurance - sum insured changes expand this product
Why is house insurance changing? view answer close
These changes are a direct result of natural disasters around the world, including our own Canterbury earthquakes. Global reinsurers (those companies that offer insurance to insurance companies) will now generally only provide cover to New Zealand insurance companies if they know the costs they face. The sum insured cover gives them this certainty and means that house insurance here can remain as affordable as possible.
What is a total loss? view answer close
A total loss is an event which causes your home to be damaged to an extent that it is more economically viable to rebuild than it is to repair.
Is sum insured linked to the market value of my house? view answer close

No*. The market value or purchase price for a house is affected by many other factors like proximity to schools or the value of neighbouring homes and typically includes your land. Your sum insured figure for insurance purposes should only reflect the actual cost of rebuilding your home like-for-like.

*Present Day Value policies are the only exception here.  Present Day Value cover is limited to the lesser of the market value of your home at the time of the loss or damage less the value of the land it is situated upon as an unoccupied, site and the sum insured.

What needs to be included in my sum insured figure? view answer close
Your sum insured value needs to include all costs that you would be charged if you needed to rebuild your home. This includes the demolition and site preparation costs, any architect and council fees, building materials and labour. You’ll also need to account for the cost involved in building any special features such as decks and outbuildings, separate garages, retaining walls as well as gates, fences, driveways, paths, permanent swimming and spa pools.
How do I calculate my sum insured for my house insurance? view answer close
Because there are many different factors that can affect the rebuild value of your home, we recommend engaging with an insurance rebuild valuation professional to calculate this value for your home or you can also use the Cordell calculator as a guide.
What is the Cordell calculator? view answer close
Cordell is a leading third party, independent provider of building and construction information. It provides this calculator as a tool to calculate the estimated rebuild cost of your home. The calculator is updated on a quarterly basis to ensure all information is current. It uses general building information and costs to give you an estimate based on the information you provide. The calculator takes into account the likely rebuild costs of your home and other structures, as well as an allowance for additional costs such as professional fees and demolition.
Am I entitled to the full sum insured if my house is destroyed? view answer close
Only if the cost of rebuilding your home to the same standard is equal to or more than your sum insured figure. It is important to remember that if the rebuilding costs are lower than your sum insured, we will only pay these actual rebuild costs. If the rebuilding costs are more than your sum insured, the most we will pay is your specified sum insured. Should there be a shortfall, you will have to meet this cost yourself. The sum insured (less any applicable excess) is the maximum we would pay in the event of a loss.
Will my retaining wall be covered? view answer close
Yes, retaining walls are covered under your house insurance policy. Be sure to include the cost to rebuild these in the sum insured you provide to us. Limits may apply to retaining walls that are not essential for the building of your domestic building(s) – see  your policy wording or renewal certificate of insurance for more details.
Is the sum insured GST inclusive or exclusive? view answer close
With TOWER your sum insured is always GST inclusive.
How often should I review my sum insured? view answer close
Each year on your policy anniversary we will adjust your sum insured value by the Building Consumer Price Index, which is how inflation is measured in the building industry. We recommend you assess this figure each year to make sure it’s right for you, as well as each time you make any renovations or other improvements.
Can I change my sum insured at any time? view answer close
Yes, although updating your sum insured once a year, at your policy renewal is likely to be sufficient. However, if you do complete any renovations, additions or work on your home throughout the year, you don’t need to wait until your policy renewal to let us know.
How will sum insured affect my farm cover? view answer close
The house(s) on your farm policy will be changing to sum insured cover. Any other buildings covered under your farm policy will remain under their current cover.
I have a Present Day Value policy, is this changing to sum insured? view answer close
Yes. Your Present Day Value policy will change in the same way as full replacement house insurance policies. The main difference is that your default sum insured figure will be the lower figure of $1,600 per square metre. Present Day Value takes into account depreciation and deferred maintenance, which means a percentage may be deducted from any claims to allow for this. Any claim settlement will be limited to the sum insured or the market value of your house, whichever is less.
Will my premiums increase? view answer close
House insurance premiums are generally increasing. However, the change to a default sum insured will not change your premium. Should you wish to change your default sum insured, there will be an associated premium adjustment.  Premiums only go up in relatively small increments. For example, an additional $100,000 on your cover may only add a few extra dollars a month to your premium.
What is TOWER’s approach to house cover going forward, is it going to change? view answer close
We will be moving to a capped cover on a sum insured basis.  However, we will be still offering Full Replacement cover until 30 May 2013 for new business and this Full Replacement cover will apply until your 2014 renewal date. For existing house policies Full Replacement cover will apply until policies renew from July 2013 onward at which point you will move to a sum insured policy. The house insurance pages of this website will be changing on 31 May 2013 and more information will be available then.
I hear some insurers are applying large excesses for driveways, fences, pools and paths – can you explain what TOWER is doing? view answer close

Starting 31 May for new policies and for all renewals on or after 1 July TOWER is introducing a $5,000 excess for driveways, fences, pools and paths that are damaged by natural disasters. This excess will apply instead of your usual voluntary excess.  This $5,000 excess only applies to natural disasters - for all other events your normal policy excess will apply. If you do not have damage to a driveway, fence, pool, or path this excess will not apply.

This new excess is being introduced in an effort to keep premiums on the main dwelling affordable. It also ensures that in the event of a large disaster customers with extensive damage to their dwelling will be prioritised over those with only peripheral damage (i.e. a driveway, fence, pool, or path).

These types of excesses will be common going forward, as they are part of the industry changes following the Christchurch earthquakes and other global events. 

When my house policy renews, does this automatically revert to a Sum insured policy? view answer close
Yes it will, for house policies renewing from July 2013 onwards.
What if you are renewing your house cover in July – do you have more information about this? view answer close
Here is some more information:
  • Customers will get a pre-renewal communication from us around 31 May which will give advance notice of the policy renewal they are about to receive. It will show the default figure we’ve set as the Sum Insured for the next renewal as well as the square metres stated for the house on our records.
  • Our website will also be updated on 31 May to have a lot more supporting information if you are renewing on the new Sum Insured basis.  We will will talk about options to assist customers with choosing a Sum Insured. These will include using registered valuers, quantity surveyors, builders, architects.  We will also provide access to an independent online calculator as a guide for customers on our website.
  • More information will also follow in their renewal pack as well, at normal renewal timeframes
In the meantime you can investigate what might be the right Sum Insured for your property eg. consider getting a valuation or talking to a building expert.
What if my house is worth more at the time that I claim? view answer close

The Sum Insured will need to cover the total rebuild cost of your house, taking into account demolition costs, professional fees and any compliance costs.  These costs may change over time due to building inflation or any renovations or additions you undertake.  We will be applying the building consumer price index adjustment to your Sum Insured at each renewal as well, in order to ensure your Sum Insured takes into account building inflation.  However, we recommend you review your Sum Insured at least once a year on policy renewal and after any renovations.

The Sum Insured stated on your certificate of insurance is the maximum amount we would pay in the event of a claim. It is up to you to set it at a figure that will meet the cost of rebuilding your house, including demolition costs, professional fees and any compliance costs in order to do so.

Will TOWER be contacting our customers prior to the renewal of their house polices to provide detailed information about the new Sum Insured approach? view answer close
  • Customers will get a pre-renewal communication from us approximately 2 weeks ahead of their normal policy renewal. This will give  advance notice of the policy renewal they are about to receive and it will show the default figure we’ve set as the Sum Insured for renewal purposes as well as the square metres stated for the house on our records.
  • Our website will also be updated on 31 May to have a lot more supporting information for customers that are renewing on the new Sum Insured basis.  The website will talk about options to assist customers with setting the Sum Insured, This will recommend the use of registered valuers, quantity surveyors, builders, architects or our free online calculator (we will provide access to an independent online calculator as a guide for customers).
  • More information will also follow in their renewal pack as well, at normal renewal timeframes
Will TOWER have a way of calculating the rebuild cost per square metre? view answer close
Our research has found that for the majority of cases, using a rate of $2,000 per sqm is sufficient to rebuild an average New Zealand home.  To help, we have calculated a default Sum Insured for you by multiplying the square metres of your house by $2000, e.g. 100m2 x 2000 = $200,000.  However, since it is your responsibility to make sure the Sum Insured is accurate, you should review this. If you have any special or high end features it is likely that this Sum Insured is not sufficient.
If I have overvalued the insurance on my house, (e.g. is only worth $500,000 but want to insure for $800,000) and it is a total loss do I get paid out the amount that it is insured for? view answer close
In the event of a total loss of your house, we will pay for the actual replacement cost up to a maximum of the Sum Insured. In a situation where the actual replacement cost is less than the Sum Insured, then the maximum we will pay is the actual replacement cost.
How do we know how much to insure it for? view answer close
There are a number of people who can assist you with deciding on an appropriate sum insured to rebuild your home. These include property valuers, experienced builders or quantity surveyors. We also have some more information on the House insurance pages of our tower.co.nz website. This includes a link to a free online calculator that can help you work out the likely cost to rebuild your home. 
 
If you are currently on a Full Replacement policy then the sum insured for your house policy should not be based on the market value of your house. The sum insured figure should only take into account the cost of rebuilding your house on its own, excluding the land cost. It should also take into account demolition costs, professional fees and any compliance costs.
 
If you are currently on a Present Day Value policy then going forward we will pay the lesser of:
 
(a) the market value of your house (excluding the market value of the land alone) at the time of loss or damage and
(b) the sum insured.
 
This means that if the sum insured is less than the market value of your house, we will only pay the sum insured. So, it is important when setting the sum insured to make sure the amount is no less than the market value of your house. It should also take into account demolition costs, professional fees and any compliance costs. Present Day Value policies are generally sold for older homes built prior to the 1950’s and that have not been re-lined, re-wired and re-roofed
Will any outbuildings have to be included in the sum insured? view answer close
Yes. In addition to covering your house, the sum insured you choose also needs to take into account any other features such as outbuildings, gates, fences,  driveways and paths that aren’t made of metal,permanent swimming pools and  spa pools etc.
When my house policy renews how do I work out what I should insure the house for under the new sum insured cover, is there any tool that I can use to determine the value that it should be insured for? view answer close
We will provide a default sum insured amount for your policy renewal, however we are not saying this default amount is the right amount for you.  It is your responsibility to ensure the sum insured is accurate for your home.  You can seek assistance with determining this by obtaining a property valuation, or talking to a builder or a quantity surveyor. We also have some more information on the House insurance pages of our tower.co.nz website and a link to a free online calculator that can also help you work out the likely rebuild cost of your home. 
 
If you are currently on a Full Replacement policy then please note this sum insured should not be based on the market value of your house.  The sum insured figure should only take into account the cost of rebuilding your house on its own without the land. It should also take into account demolition costs, professional fees and any compliance costs.
 
If you are currently on a Present Day Value policy, then going forward we will pay the lesser of:
 
(a) the market value of your house at the time of loss or damage, excluding the value of the land it is situated upon as an unoccupied site and
(b) the sum insured. 
 
So your house market value is the maximum figure we will pay in the event of a claim under a Present Day Value policy, therefore it is relevant to consider this when setting your sum insured for these types of policies.  Present Day Value policies are generally sold for older homes built prior to the 1950’s and that have not been re-lined, re-wired and re-roofed.
Can I insure my house for a higher value than it is actually worth? view answer close
We will pay to repair or rebuild your house to the same size and specifications as before the loss, up to a maximum cost of the nominated sum insured. So you can insure your house for a higher value - but this will mean you simply pay more premium than you need to. The policy only ever pays the actual cost to rebuild. It makes no difference if the sum insured is higher than this. So you should aim for a sum insured that will be sufficient to rebuild your house, including demolition costs, professional fees and any compliance costs, and no more.
What will happen to the Present Day Value policies? view answer close

Present Day Value house policies will also become sum insured policies from 31 May 2013 onwards for new business and for policies renewing from July 2013 onwards. The default sum insured on renewal will be calculated at a lower square metre rate ($1,600 per square metre) than Replacement policies ($2,000 per square metre), as we tend to make lower payments in the event of a total loss because the cover takes into account depreciation.

For a Present Day Value house policy going forward we will pay the lesser of:

(a) the market value of your house (excluding the market value of the land alone) at the time of loss or damage and
(b) the sum insured.

What are demolition costs, professional fees and compliance costs? view answer close

Demolition costs are the costs to demolish your house and remove the debris before rebuilding can begin.

Professional fees are the costs incurred by professionals in rebuilding your house, such as architects, engineers etc.

Compliance costs are those costs required to make sure the rebuild is compliant with the current building code.

Why can’t you do the online calculator for me? view answer close
We need you to take your time calculating your Sum Insured.  This is to ensure that it is as accurate as it can be and that you are comfortable with the outcome.   We cannot complete this calculation on your behalf because this usually takes 5 – 10 minutes to complete and involves looking at some images, which are difficult to describe over the phone. We are happy to give you a follow up call on a day and time that suits you once you’ve had a chance to work out the Sum Insured for your house.
What if my house involves shared ownership? view answer close
  • If you share a driveway or fences with your neighbours, you’ll need to decide what you’ll each insure and for how much.
  • If you live somewhere governed by a body corporate, like an apartment complex, the body corporate usually has one insurance policy covering all the units in the complex, and all the common property. This may already be insured on a sum insured basis – you can find out from your body corporate secretary or committee.

You’ll need to understand the extent of your liability and allow for it in your sum insured.

Why have my levies increased now that I am on a sum insured policy? view answer close
Prior to the transition to sum insured, the levies were calculated based on a sum insured cover calculated using the square metres noted on the policy and a value of $1,000 per square metre. After the transition to a sum insured policy, the legislation published by the EQC specifies that the levy should be calculated on the actual sum insured, subject to a maximum of $100,000 (excl GST).
 
For example, 50 sqm house:
 
Full replacement policy
Sum insured policy ( $100,000 sum insured)
EQ cover
50 sqm* $1,000/sqm = $50,000
$100,000
Levy
$50,000 cover*0.15%=$75
$100,000*0.15%=$150
 
This means that any house that is under 100sqm is likely to see an increase in the Earthquake levy following the transition to a sum insured policy.