House insurance, what it actually covers

No, and they are commonly a long way apart. The sum insured is the cost of rebuilding the house as it stands, including demolition, site clearance and professional fees. Market value includes the land and reflects what a buyer would pay, which is driven by location as much as by the building. A rating valuation is a third number again, produced for council rating purposes on a mass-appraisal basis. Only the rebuild cost is relevant to a building claim.

The homeowner does. New Zealand moved away from open-ended replacement cover after the Canterbury earthquakes, and policies are now written to a stated sum insured. Insurers make rebuild calculators available and will accept a valuation from a registered valuer or a quantity surveyor, but the figure that appears on the policy schedule is the policyholder’s, and it is the maximum the building side of the policy will pay.

No. A house policy covers the building and the structures fixed to the property. Furniture, appliances, clothing, electronics and other belongings are covered by a separate contents policy, which is a different product with its own sum insured. Many insurers sell the two together and bundle the administration, but they remain two policies with two limits.

The Commission covers a first portion of natural hazard damage to a home, and it also covers some of the land around it, which private house policies generally exclude entirely. Cover is automatic for any home carrying private fire insurance, and the levy is collected by the insurer within the premium. Above the Commission’s cap, the private policy responds up to the sum insured. Current caps and land cover rules are set by legislation and published at nhc.govt.nz.

Usually not as ordinary damage, because insurance responds to sudden and accidental events rather than to deterioration. Many New Zealand wordings do include a limited hidden gradual damage benefit for water escaping from pipes inside the building, typically with its own limit and conditions such as a requirement that the leak was not reasonably detectable. Whether a particular leak falls inside that benefit turns on the wording and the facts.

It can. Unconsented or uncertified work is something a prudent insurer would generally want to know about, so it falls within the disclosure duty, and some wordings exclude or limit cover for damage arising out of the non-compliant work itself. Insurers vary in how they treat it, and a great deal depends on the nature of the work. Disclosing it at quote time is what preserves the position either way.

Cover through the period between signing and settlement is a question the sale and purchase agreement addresses, and the standard agreement used in New Zealand allocates risk between the parties. In practice both a seller and a buyer commonly hold cover across that window. It is a point worth confirming with the solicitor handling the conveyance rather than assuming, because the answer depends on the terms of the particular agreement.

Excesses generally apply per claim event rather than per policy period, so two unrelated events in a year usually attract two excesses. Many policies also apply a separate, and often larger, excess to natural hazard claims, and some apply specific excesses to particular perils or to properties with certain characteristics. The schedule issued with a policy lists the excesses that apply to it.