NEW ZEALAND HOMEOWNERS OFTEN UNAWARE OF REBUILD RULES CHANGE

A survey by Australian insurer IAG has found that two-thirds of homeowners in New Zealand are unaware of changes in the terms & conditions of their policies that mean they are responsible for calculating the cost of replacing their home. Under the old guaranteed replacement system, policies promised to rebuild homes, whatever the cost. But, after the earthquakes in the Canterbury region of 2010/2011, reinsurers imposed new restrictions on primary policies as a condition of them offering reinsurance cover. One of those restrictions was that a policy now contains a "sum insured" – a maximum rebuild payout. IAG's survey found that only 35% had a notion of how much it would cost to rebuild their home. IAG intends to launch a website that explains the changes to all homeowners in New Zealand, and will publicizing it through several media. An online calculator will assist users in working out the replacement cost of their home. The site, need2know.org.nz, should be online by the end of the month. All new policies at ASB, AMI, BNZ, Cooperative Bank and State will be sum insured from various dates in May. At Lantern and NZI the change is on April 20. Renewals of existing replacement policies will move over to sum insured in May at AMI and State, on June 1 at BNZ and Co-op, and on July 1 at ASB, Lantern and NZI. IAG companies will estimate a sum insured based on information it has about a policyholder's home, but it said that policyholders would need to check whether this is accurate.