Why do house insurance premiums change?

Your premium is based on a few things specific to you, like your claims history and the type of assets you own. We also adjust your sum insured before you renew each year. This is so we can keep up with rising building costs.

There are other things we need to consider when we adjust house and landlord premiums, like:

More bad weather and natural events

With more bad weather and natural disasters happening around New Zealand due to climate change, there’s been an increase in claims for things like storms and floods. Unfortunately, this raises the cost of insurance.

To show our commitment to sustainability and do our part to fight climate change, we try to work and act in an environmentally friendly way. We also work closely and share knowledge on our understanding of climate-related risks around the country with local councils, government and ICNZ. Together, we can increase our understanding of climate-related risks and promote preventative measures to tackle its impacts. Read more about our focus on sustainability.

Inflation and rising building costs

Thanks to things like inflation, building costs are going up every year, so, to keep up – premiums do too. And regulatory changes can also affect costs to repair or rebuild.

So, every year we adjust your sum insured based on the Cordell Housing Pricing Index. This keeps us updated with current building costs and makes sure you’re covered in case of a total loss.

Recently renovated? Check out our Sum Insured Calculator to make sure your sum insured has you covered.

Reinsurance costs are going up

Reinsurance is insurance for insurance companies. If there’s a large event that affects a whole community, reinsurance is there to help insurers cover the costs of claims. It acts as a guarantee that if something major happens, we can still pay out your claim and get you back on your feet as quickly as possible.

Due to increasing bad weather events and natural disasters, both here and worldwide – reinsurance premiums are increasing. These costs are passed on to customers through  increased premiums.

Levy increases can also affect your premiums

Tower collects levies (or fees) on certain insurance premiums on behalf of the government for some natural disasters and for fire and emergency services. These are the EQC levy and the Fire & Emergency levy. Occasionally, levies are increased by the government. These increases are outside of Tower’s control and need to be implemented by all insurers. Read more about these levies and any upcoming increases here.

There are ways you can save

We understand that any increase in premiums is tough. But there are some ways to make sure you’re not paying more than you need to, like:

• Checking your excess level. A higher excess can reduce your premium, just make sure you can afford a higher excess if you need to claim.
• Making the most of our multi-policy discount, where you could save up to 20% by having multiple policies with us*.
• Or, through our one event, one excess policies, where you’ll only pay one excess – even if you need to claim on multiple policies for a single incident at the same address. 

You can read more top tips on ways to save on your insurance here.

 *Multi-policy discount Ts&Cs apply.