|Home insurance changes||View all|
|Do the changes to home insurance underwritten by IAG and its brands have any impact on other IAG insurances?|
IAG’s motor vehicle insurance will remain unaffected by this change. Our home contents insurance will remain largely unaffected except for cover for fitted carpets, which will eventually be excluded from contents policies. This is because cover for fitted carpets will become covered under the home policy with the new wordings.
|When does this change take effect?|
For IAG and its brands the move to home insurance policies based on a Sum Insured takes effect from the second quarter of 2013 for all new customers' home policies and from then on when existing customers' home insurance policies renew.
|What is the reason for the change?|
The reason for the change is that our reinsurers – the companies who insure us against the cost of major natural disasters and catastrophes – now require homes we cover in New Zealand to be insured for a specified amount. This is because they want to know the maximum amount that insurers would have to pay to rebuild homes they insure.
|How can I find out how many square metres my home is?|
There are several ways to measure the floor area of your property. You can check the property information held by your local council, or refer to your house plans if you have them. You need to be sure, though, that such information is up to date. You can also check with the builder or building firm that built the house, or hire a builder or assessor to assess the property. You can also measure it yourself if you feel confident doing so.
|Do these changes affect all types of homes, including apartments, investment properties and holiday homes?|
The changes to home insurance affect IAG and all its brands, irrespective of property type or use. However, the changes to our home insurance do not affect residential buildings that are insured on a commercial insurance product and some moderate to large bodies corporate will already be on a Sum Insured policy.
|If I make an alteration to my home part-way through the year and want to increase the amount of my home cover, should I increase the Sum Insured?|
Yes. If you are about to make any alterations or improvements to your home, or make alterations through the year, you should contact your broker:
to see if you need a contract works insurance;
so that you can factor these improvements into your home insurance policy. You should deal with this in the same way you would for other Sum Insured policies such as contents and motor vehicle. For example, if you bought a new $10,000 entertainment system, you would be advised to increase your contents cover accordingly.
|Can I increase the Sum Insured if I don’t think the Sum Insured that my insurer provides is enough?|
Yes. It’s up to you to decide the most appropriate Sum Insured for your home. There are several ways to work out what your home could cost to rebuild. These include obtaining a Valuation for Insurance Purposes from a registered valuer or an estimate from a licensed builder or building assessor (a cost may apply).
We have also provided a calculator on need2know.org.nz, which can assist you with estimating your likely cost of rebuilding. The calculator is not suitable for extremely large homes, such as those in excess of 700 square metres, or high value homes where the likely cost of rebuilding would exceed $2 million.
|Earthquake-prone buildings||View all|
|What is an earthquake-prone building?|
Under the Building Act 2004, a building may be classified as ‘earthquake-prone’ if in a moderate earthquake it would be likely to collapse causing injury or death, or causing damage to any other property.
A moderate earthquake is defined as ‘in relation to a building, an earthquake that would generate shaking at the site of the building that is of the same duration as, but is one-third as strong as, the earthquake shaking (determined by normal measures of acceleration, velocity and displacement) that would be used to design a new building at the site’.
Essentially, what this means is that a building is ‘earthquake-prone’ if fails to meet 34% of the current New Building Standard (NBS) because it would be likely to collapse in a moderate earthquake.
|What is a Section 124 Notice?|
A council may issue a Section 124 Earthquake Prone Building Notice if a building is considered to be earthquake prone. The notice could give a required strengthening date for completion of say 10-20 years and this information, along with the percentage NBS grading, will be recorded on the Land Information Memorandum (LIM).
|What is an Initial Evaluation Process (IEP)?|
A qualified structural engineer conducts an evaluation of a building’s earthquake structural performance. Many of these will be initiated by councils unless the property owner is proactive and starts the process earlier.
The objective of the IEP is either to:
determine the level of performance in relation to the current code, or
establish whether or not the building meets the one-third threshold, i.e. 34% of the NBS.
|What is a Detailed Engineering Evaluation (DEE)?|
This is a more detailed evaluation completed by a qualified structural engineer, usually commissioned by the building owner.
The objective of a DEE is the same as an IEP. In assessing the building’s structural performance, there may have been some conservative assumptions used during the IEP process and a DEE will address these assumptions.
A DEE will generally cost more than an IEP and will show the same information as in the IEP report, with more detail.
|Do I have to let my insurance company know if a building I own is issued a Section 124 Notice?|
Yes, it’s a material fact for insurance purposes. If you own such a building, you need to let us know immediately and discuss the insurance implications with your NZI broker.
The issue of an IEP or DEE is a material fact if it records an outcome of less than 34% of the NBS.
|What options do property owners have if their building is earthquake prone?|
If a property owner has a Section 124 Notice on a building, the following options apply:
Undertake re-strengthening of the building. The Section 124 Notice will be removed once this has been completed.
Demolish the building (but note this is not possible if there is an Historic Places order on the building as well).
Leave the building as is, but it will be condemned by the council once the date for re-strengthening on the Section 124 Notice has passed.
|Insurance terms||View all|
|What is an insurance broker?|
Insurance brokers provide a link between insurance companies and customers. They act in the interest of their clients, who may be individuals, businesses or other organisations.
Brokers use their in-depth knowledge of risks and the insurance market to find the most suitable policies for their clients. They arrange your cover with the insurance company and can often advise you on how to make the most of your insurance budget.
At NZI we sell insurance through a nationwide network of qualified and experienced brokers. This means our mutual clients get informed, independent advice from some of the best insurance brains in the business.
Find out more about the benefits to you of using a broker.
|What is an insurance policy?|
Your policy is a contract between you and your insurance company that sets out the conditions and details of your insurance cover. A policy schedule sets out the personal details of your insurance.
|What is a premium?|
A premium is the amount you pay to have your property or personal effects insured. Depending on the type of cover you have, your premium can also include Earthquake Commission and Fire Service levies. When you pay your premium, you accept the policy offered by the insurance company.
|What is a claim?|
When loss or damage occurs that’s likely to be covered by an insurance policy, this is the action that the policy holder takes to obtain the benefits provided by the insurance policy.
|What is an excess?|
This is the amount of a claim that you have to pay yourself. The type and amount of excess changes, depending on the item insured and disclosures made when you took the policy out.
|What does Sum Insured mean?|
Under a sum insured policy, we agree on cover up to a maximum specified amount. With this type of policy, it’s important to update your Sum Insured regularly, otherwise the amount of cover you have may not be sufficient to totally replace your valuables.
|What is meant by duty of disclosure?|
When you apply for insurance you have a duty of disclosure. This means you must tell us everything you know that an insurer would want to take into account when considering your application for insurance or determining the cost and terms of your application.
The duty of disclosure doesn’t just apply when you take out your insurance. If something happens at any time that you think we ought to know about, then this duty means you are bound to let us know about it. Examples might include criminal convictions, traffic offences other than minor infringements, or modifications to your vehicle or home.
You also need to let us know about any person or organisation with a financial interest in an insured item.
|What is legal liability?|
Legal liability is when you’re found to be responsible for damage to someone else’s property or injury to someone else, by the courts, a tribunal, arbitration or by mutual agreement.