Owning a home in New Zealand has always come with a few risks—earthquakes, floods, and the occasional volcanic rumble. But lately, the real shake-up isn’t just under our feet; it’s happening in the insurance market. The old assumption that house insurance would always be affordable and readily available is changing a little.
Even though it is early days, it is something you should be aware of for one important reason. Insurance is on an annual basis, so if things like coastal inundation becomes more pressing, renewal terms can be restrictive. Which could lead to not being able to secure or keep lending.
Insurance companies currently are more likely to hike premiums in areas of concern than to cancel.
For homeowners, the fallout can be brutal:
- No insurance = no mortgage. Banks simply won’t lend without it.
- Uninsurable homes are basically unsellable. Property values plummet
The Hazards Driving This Shift
Flooding and Inundation
It’s not just about whether a property has flooded before. Some Insurers are starting to look at flood maps.
Yes, new builds can be raised above water level, but that doesn’t fix the bigger issues. Flooded roads, disrupted utilities, and cut-off water supplies? Those problems still make entire areas hard to live in—even if your house itself stays dry.
Earthquakes
If you’re in Wellington, this one’s no surprise. Older homes are red flags, especially anything pre-1935, before modern building codes came into play. Even newer buildings face scrutiny, with insurers checking Measured Building Standard (MBS) scores.
What Buyers and Owners Must Do
In this new world, doing your homework isn’t optional—it’s essential:
- Check insurance before buying. Don’t sign on the dotted line until you know a property can actually be insured.
- Know the local risks. Ask about flood history, check hazard maps, and understand whether earthquake risk is factored into premiums.
- Don’t assume new builds are safe bets. Even with warranties and fresh code compliance, they can still face major headaches if access roads flood or services shut down.
Bottom Line
Insurance in New Zealand is no longer a boring checkbox in the home-buying process. It’s a frontline issue that can make or break the value, saleability, and financial safety of a property.
If you’re buying, selling, or refinancing, treat insurance like a deal-breaker—because increasingly, it is.
