This is not an owner-occupier policy
Most of the wordings on this site cover a house someone lives in. This one does not, and reading it as though it did will mislead you.
The Initio document is a policy for landlords and holiday home owners. Everything in it is built around a house that is rented out, let to paying guests, or empty for long stretches. That shapes the benefits, the excesses and the exclusions.
If you are looking for cover on the house you live in, this is not the product to compare, and the limits below are not the ones to weigh against an owner-occupier policy.
Who carries the risk behind the Initio name
Initio sells online and presents itself as a modern, direct brand. The company behind the policy is NZI, which the wording describes as a business division of IAG New Zealand Limited.
That places Initio in the same family as AMI and State. IAG is the largest general insurer in the country, and four of the brands you can buy house cover from in New Zealand lead back to it.
The wording gives its own small illustration of how the family works. Its methamphetamine clause waives one of its conditions where you have been insured continuously with Initio or with any other brand underwritten by IAG New Zealand. The group treats its brands as one history for that purpose.
Sixty days, and the five thousand dollar excess
This is the most important number in the policy for most of the people buying it.
Where you, or someone you have authorised, have not been living at the house for more than sixty consecutive days, cover continues. It does not stop. But an excess of five thousand dollars applies to each incident from that point on.
There is one way to reduce it. Where the loss comes from a break-in or an attempted break-in, and the house is fitted with an active, professionally installed alarm or security system, the excess drops to one thousand dollars.
Both conditions run until someone is living in the house again.
For a holiday home this is the clause to plan around. A bach used for a few weeks a year is over sixty days empty for most of the year, so the five thousand dollar excess is the normal state of the policy rather than an exception. An alarm changes that figure only for break-ins, and not for a storm, a burst pipe or a fire.
What is capped inside your sum insured
The home sum insured is the figure for rebuilding the house. Two categories sit inside it rather than on top of it, and both are capped.
All retaining walls together come to twenty five thousand dollars. All recreational features together come to forty five thousand dollars. Either figure can be increased, but only where the schedule shows a higher limit.
Twenty five thousand dollars is the lowest retaining wall cap in any of the wordings read for this site. On a sloping section, or a bach cut into a hillside, that is a number to look at hard.
The wording also treats a set of rural and lifestyle items as included only up to a value. A bridge, culvert, permanent ford or dam is included where its replacement cost is fifteen thousand dollars or less. A well or bore hole with its pump, lining or casing is included at ten thousand or less. Private utility plant such as a wind mill, water mill or diesel generator is included at ten thousand or less.
Anything above those values, and a wharf, pier, landing or jetty, or a cable car, has to appear on the schedule as a special feature with its own sum insured. If it is not on the schedule, it is not insured.
What is included as standard
The figures below come from the wording named at the top of this page. Several are shared across every Initio policy you hold rather than applying to each one.
A larger limit is not better cover on its own. What the clause allows the money to be spent on is what matters, and the notes on the right are where that shows.
| Benefit | What it covers | Limit |
|---|---|---|
| Retaining walls | All retaining walls on the property, added together. | $25,000, inside the home sum insuredThe lowest retaining wall cap of any wording read for this site. A higher limit can be shown on the schedule. |
| Recreational features | Pools, courts and similar features, added together. | $45,000, inside the home sum insuredAlso a cap within the sum insured rather than money on top, unless the schedule raises it. |
| Intentional acts by tenants or guests | Deliberate damage, vandalism or theft by a tenant, a paying guest, anyone occupying the house, or their guests. | $25,000 per eventWhere contents are also covered, the $25,000 is the combined ceiling for house and contents together. |
| Hidden gradual damage | Damage from a hidden leak, plus opening up undamaged parts of the house to find the cause. | $3,000 per annual periodIt will not pay to search for or repair the source of the problem, and opening up needs permission first. |
| Landscaping | Gardens and lawns damaged by the same event, or wrecked by the repair work. | $2,500 per eventPaid in addition to anything else under the policy. |
| New structure | A new structure being built at the property, and materials for it. | $10,000 per annual periodNothing where the work is worth more than $10,000, alters the existing house, digs deeper than a metre, or lacks a required consent. |
| Keys and locks | Replacing keys, altering or replacing locks, or opening a safe or strongroom. | $1,000 per annual period, no excessShared across every Initio policy you hold, so it is $1,000 in total rather than per policy. |
| Blocked pipes | Clearing a blocked water or sewage pipe within the property boundary. | $1,000 per annual period, no excessClearing only. No other maintenance. |
| Stress payment | A payment where the damage is uneconomic to repair. | $1,000Paid in addition to the rest of the claim, and shared across your Initio policies. |
| Legal liability | What you owe others for damaging their property or injuring them. | $2 million per eventPaid in addition to the rest of the policy, and defence costs are on top again. |
| Methamphetamine contamination | Testing and remediating a contaminated part of the house. | The amount shown on your scheduleCarries its own excess of $2,500, or your schedule excess if that is higher. |
| Demand surge | More than the sum insured where a disaster pushes building costs up sharply. | At Initioβs discretionThe wordingβs own example lifts a $500,000 total sum insured to $550,000. It is discretionary, not a guarantee. |
| Empty house excess | What applies once nobody has lived there for more than 60 consecutive days. | $5,000 per incidentFalls to $1,000 where the loss is a break-in and the house has an active, professionally installed alarm. |
| Natural hazard excess | What applies to the parts of the property the Commission does not cover. | The higher of $5,000 and your normal excess |
The excess comes off after the limit, not before
This is a small clause with a large effect, and the wording spells it out with its own example.
The excess is deducted after any policy limits have been applied. So where a benefit is capped at one thousand dollars and your excess is four hundred, the amount paid is six hundred.
Read across the table above and the consequence is that every capped benefit is worth its stated figure minus your excess. The thousand dollar keys benefit and the thousand dollar drain clearing benefit are exceptions, because the wording says the excess does not apply to those two.
One rule runs in your favour. Where a single event triggers more than one benefit, only one excess applies, and it is the highest of the ones that could have applied.
Damage caused by the people in the house
This is what a landlord policy is really for, and it is where an ordinary house policy would leave a gap.
Initio covers intentional acts, vandalism and theft by a tenant, a paying guest, anyone occupying the house, or any of their guests. The most it pays for any event is twenty five thousand dollars.
Where you also hold contents cover, that twenty five thousand is the ceiling for house and contents combined rather than a separate figure for each.
Loss of rent is covered where a tenant can legally stop paying under the tenancy agreement because of damage. Methamphetamine contamination is covered up to the amount on your schedule, and carries its own excess of two thousand five hundred dollars, or your schedule excess if that is higher.
Twenty five thousand dollars covers a bad tenancy rather than a catastrophic one. It is worth knowing the figure before you need it, because putting a house right after deliberate damage moves quickly past that.
Hidden leaks, and the part it will not pay for
Initio pays up to three thousand dollars in an annual period for hidden gradual damage. That figure is higher than most, and the clause around it is tighter than the number suggests.
It covers the damage, and it covers opening up other parts of the house that are not themselves damaged, where that is necessary to locate the cause. Permission has to be given first.
It explicitly does not pay the cost of searching for the source of the problem, or of repairing it. So the plumberβs time finding the leak and the plumberβs time fixing it are both yours.
On a house you do not live in, this matters more than usual. Nobody is there to notice the damp patch, which is exactly why the sixty day inspection habit is worth having whether or not any policy requires it.
Natural hazards, and the five thousand dollar gap
Natural hazard damage in New Zealand runs in two layers. The Natural Hazards Commission covers a set amount, paid for by a levy on every household policy that includes fire, and your private insurer covers the rest.
The Initio wording adds an excess where the first layer does not reach. Where your claim is for, or includes, any part of the house that the scheme does not cover, the excess becomes the higher of five thousand dollars and your ordinary excess.
The parts outside the scheme are the ones on the outside of the house. Drains, pipes and cables. Driveways, paths and patios. Fences and walls other than retaining walls. External pools and tennis courts.
On a holiday home that is a real exposure, because those are the things a hillside earthquake or a slip damages first, and they are the things a bach tends to have a lot of.
Stack that with the sixty day empty-house excess described above and a single event can carry both. It is worth working out what the two together would cost before you need to.
What the policy does not cover
The general exclusions are the standard set. Wear and tear, gradual deterioration outside the hidden damage benefit, faulty workmanship, pests, mechanical breakdown, and anything intentional or reckless done by you.
A few of the item rules matter more on the kind of property this policy is written for.
Loose floor coverings, including mats, rugs and runners, are out, and so are fitted floor coverings of the dwelling and its outbuildings, which belong on a contents policy instead. Watercraft and outboard motors are handled by value, with a two thousand five hundred dollar line separating what is treated as part of the property from what is not. Motor vehicles other than domestic garden equipment are excluded.
The rural and lifestyle inclusions described above are also, read the other way, exclusions. A bridge worth more than fifteen thousand dollars, a bore worth more than ten thousand, or a generator worth more than ten thousand is not partly covered. It is not covered at all unless the schedule names it as a special feature.
Contamination is excluded unless it happens during the period of cover and comes from a sudden accidental event. Pre-existing contamination is excluded unless it was disclosed to and accepted by Initio in writing, with one exception. Where you have been insured continuously with Initio or with another brand underwritten by IAG New Zealand since the contamination first happened, that condition is waived.
What to check before you buy
These are the points where the Initio wording gives a different answer depending on the property and how it is used.
Worth settling first:
- How many days a year the house is genuinely empty, and whether the five thousand dollar excess is your normal state.
- Whether the alarm is professionally installed and active, since that is what drops the break-in excess to one thousand.
- What your retaining walls would cost to replace, against a cap of twenty five thousand inside the sum insured.
- Whether any bridge, culvert, well, bore or generator on the property is worth more than the included value, and whether it is on the schedule.
- What figure the schedule shows for methamphetamine contamination, and what the excess on it would be.
- That your excess comes off after the benefit limit, so each capped benefit is worth less than its number.
Common questions
- Who underwrites Initio?
- NZI, which the wording describes as a business division of IAG New Zealand Limited. That puts Initio in the same group as AMI and State.
- Does Initio insure a house I live in?
- The wording read here is a landlord and holiday home policy. It is written for a house that is rented out, let to paying guests, or empty for long periods, and its benefits and excesses reflect that.
- What happens if an Initio-insured house is empty?
- Cover continues past sixty consecutive days, but a five thousand dollar excess applies to each incident from that point. Where the loss is a break-in or attempted break-in and the house has an active, professionally installed alarm, that drops to one thousand dollars.
- How much does Initio pay for damage caused by tenants?
- Up to twenty five thousand dollars for any one event, covering intentional acts, vandalism or theft by tenants, paying guests, occupiers or their guests. Where contents are also insured, that figure is the combined ceiling for house and contents.
- Are Initio retaining walls covered?
- All retaining walls together are capped at twenty five thousand dollars, and that sits inside your home sum insured rather than on top of it. A higher figure applies only where your schedule shows one.