How to set a 'sum insured' for your home

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The 2010-2011 earthquakes have forced the insurance industry to change how they deal with house insurance. Now, rather than just insuring your home for its replacement value, you’ll need to set a ‘sum insured’.

The amount needs to be enough to not only rebuild your home (including any outbuildings, fences, retaining walls etc.) from scratch, but also deal with any potential demolition and compliance costs.

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What is my ‘sum insured’?

The sum insured is the most that will be paid out when you make a claim under your house insurance policy. Check out this quick clip for what your insurer will need to know, and how to set up your sum insured here

Insurance companies in New Zealand introduced the term "sum insured" to house insurance policies in 2013. It means that you’re now expected to know how much it would cost to replace your home if you suffered a fire, earthquake or other major disaster. The amount you choose should also include demolition costs, building consents and professional fees.

If you’re unsure what your sum insured value should be, you can use the link to the Cordell Sum Insured Calculator as a guide, you'll find this within the online quote process on Trade Me Insurance, or get in touch with a valuation professional.

You can expect your rebuilding cost to change over time. This might happen because construction costs change or because you’ve completed a renovation or addition to your home. To ensure your sum insured stays accurate, you should review it whenever your policy renews or after you undertake major work.

You can change your sum insured at any time.

Who sets my sum insured?

It's up to you to ensure you've accurately set your 'sum insured' value to adequately cover all potential rebuilding expenses, including any outbuildings, fences, retaining walls etc. Make sure you've estimated your rebuild costs correctly, to avoid being caught short.

You can enter your 'sum insured' when you go through the quote process online with Trade Me Insurance. If you already have insurance with us, you'll find it on your certificate of insurance within the 'My Insurance' portal after you log in.

This information is not intended as a complete guide, as it doesn’t consider your individual needs or financial situation. Trade Me accepts no responsibility or liability for any inaccuracies or omissions in the content. Always obtain independent legal advice before buying or selling property.