New research from the Natural Hazards Commission (NHC) reveals many New Zealand homeowners don't fully understand what their natural hazards insurance would cover after an event.
Now, the NHC is urging homeowners to get to know their cover -- before they need it.
A NielsenIQ report has found that only a third (33%) of insured homeowners are confident they know what damage to their home would or would not be covered by insurance after a natural hazard event. Even fewer (26%) were confident they understood what would be covered for damage to their land.
“We know people don’t always have information on what they are covered for front of mind. Life is busy and we often juggle information overload, but it can cause confusion and frustration after a disaster if homeowners don’t know what they are protected for, especially if people find they don’t have the cover they thought they did,” said Ms Tina Mitchell, NHC’s chief executive.
The Commission provides a first layer of insurance for natural hazards damage to insured residential homes and some land. Everyone with a home insurance policy pays a levy into a fund that contributes to repairs if the insured property is damaged by a natural hazard.
The scheme covers damage up to NZ$300,000 ($180,000) for a home and holiday home, and some limited cover for land when the damage is caused by certain natural hazards.
Additional cover for the house is then determined by the insured’s private insurance policy, but there is no other cover available for the land.
“New Zealand is one of the only countries in the world where homeowners can get financial support for damage to land, through the natural hazards insurance scheme. We’re really lucky to have it, but it has limits and is usually only a contribution to repairs,” said Ms Mitchell.
This is to ensure that every homeowner across the country gets access to some protection, even though it is only likely to be a contribution to the actual costs of repair.
Ms Mitchell said, “It is important to know what you are covered for, and where those limits are, so you can take practical steps to strengthen your property before disasters occur. For example, strengthening retaining walls and considering how waterways might impact your property are good things to check regularly. The scheme is there to help with a financial contribution, but the statutory limits mean it may not cover all of the damage.”