What makes up your premium?

Your premium is made up of several factors that can change from year to year—let's break down what goes into it. 

You'll notice some costs are general, while others are unique to your property. This is why no two premiums are exactly the same. 

Breaking down a house insurance premium

Here's an example of a premium, to show where costs go. (The graph is illustrative only and based on hypothetical data, not an actual premium, because every premium is different).

Average house premium

Base premium

This is used to cover general claims and operational costs, including our own insurance (known as reinsurance), helping protect us and our customers during significant events and catastrophes.

Risk-based premium

Using risk-based pricing, this part of your premium is based on your property's individual risk of being damaged by specific natural hazards.*

Natural Hazards Insurance (NHI) levy

This is a mandatory government levy collected by insurers and passed on to the Natural Hazards Commission Toka Tū Ake (NHC) to help rebuild or repair your home if it's damaged by specific natural hazards. Learn about NHI levy.

Fire and Emergency New Zealand (FENZ) levy

This is another mandatory government levy. We collect it, and pass it on to FENZ to help them operate fire and emergency services across Aotearoa. Learn more about the FENZ levy.

Tax (GST)

Your premium includes a 15% Goods and Services Tax (GST).

What is risk-based pricing?

When we assess your property's natural hazard risk (which informs the risk-based premium above) we look at your property individually, not anyone else's. This is a fairer way to price insurance. If we don't have data for one of the natural hazards at your address, community-level data is used instead.

Risks can change over time, so we may update premiums as new data comes in. 

Learn about risk-based pricing

What else can cause premiums to change?

  • Increasingly frequent bad weather events mean more claims for insurers to cover, which can lead to higher premiums. 
  • Inflation and rising building costs also play a role, impacting the cost to repair or rebuild.
  • Reinsurance, which helps insurers recover from large-scale disasters, can change over time due to global trends, and those costs are shared across premiums.
  • Government levies (mentioned above) can occasionally go up.

It's important to understand what influences your home insurance premium so you can make informed decisions. 

Save costs on your premium

While some factors—like government levies—are out of your hands, others aren't. Here are some practical tips to help save on your premium without compromising your cover.

Ways to save

Questions about your premium?

To run through your options, the quickest way to get help online is by emailing us in My Tower. Or if you'd rather speak with someone, give us a call on 0800 379 372. 

If your circumstances have changed or you need additional support, our higher care team is here to help. 

Log in to My Tower

*Note that if no risk data exists for one of the above hazards at your specific address, community-level data is used to calculate your premium instead.