New Zealanders are facing a crisis in home insurance, with costs soaring by over 900% since the year 2000. The staggering increase is based on data from Stats NZ.
Consumer NZ is now urging the government to act. The consumer watchdog wants a national plan to keep insurance both available and affordable.
The warning comes in a new report titled, ‘Will you be able to get home Insurance by 2035?’. Its author, Consumer NZ investigative team leader Rebecca Styles, says the need for insurance is growing even as access shrinks.
“If we don’t act now, it’s entirely possible that many New Zealanders won’t be able to get insurance at all by 2035,” Styles said.
A Growing Financial Burden
The report highlights a cost-of-living crisis hitting insurance. More people are cancelling or not renewing their policies because they cannot afford them. That number has jumped from 7% in 2022 to 17% this year.
Insurance is now one of the top four financial worries for Kiwis. It ranks behind only housing, food, and household debt.
“People are dropping cover or being priced out entirely,” Styles said. “This will only get worse without serious intervention.”
Key Problems in the Insurance Market
The report identified major issues, including:
- Low trust in insurers, driven by poor communication and dissatisfaction with claims handling.
- A lack of transparency in how risk affects pricing, leaving homeowners confused.
- Limited choice, especially in high-risk areas where getting quotes is difficult.
- Higher profits for insurers, with New Zealanders seemingly charged more than Australians for similar cover.
A Five-Point Plan for Action
Consumer NZ is calling for action on five key fronts:
- A National Climate Adaptation Framework: The government must lead a plan to identify at-risk homes and outline options to protect them or managed retreat.
- Greater Industry Oversight: It wants the FMA to investigate risk-based pricing and the Commerce Commission to study competition in the sector.
Better Transparency and Claims
- Standards: Insurers should clearly explain price changes and be held to set time frames for settling claims.
- Innovation and Consumer Tools: Improve comparison tools and risk data. Insurers should reward homeowners who make their properties more resilient.
- A Stronger National Safety Net: Ensure the Natural Hazards Commission is fit to serve communities facing climate change challenges.
Styles warned of the broader social impact if no action is taken. “If insurance becomes a luxury only available to a privileged few, the impacts on communities, our economy and society will be severe.”
The report was supported by The Brian Gaynor Initiatives – Business Writing and Journalism Excellence Award.
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