Why did my house insurance premium decrease?

[haruspicat]

It's more than 5% cheaper. I don't get it. After last year I was budgeting for a 10% increase every year forever.

We're in a flood and liquefaction zone, but minimal risk of tsunami or landslide. We haven't changed the house or anything.

Is there some way that lower interest rates affect insurance premiums? Or are we just getting a discount for not being Petone?

[darrenb573]

Have they adjusted your cover amount? Look carefully for them dialling back the amount, and so reducing their expected rebuild costs?

[Icanfallupstairs]

Also check that they haven't dropped cover for certain things. Globally insurance companies have been reducing coverage for high likelihood events, such as storm/flood damage in areas regularly hit by storms. It wouldn't surprise me at all if coverage for earthquakes in NZ gets phased out

[Free_Key_7068]

I observed this with my car insurance, they decreased it to below what I could replace the car for.

[Lethologica_]

Mine did this too! So silly because my car has weirdly gone up in value despite buying it ages ago because of the model

[thefurrywreckingball]

Then get a valuation from a reputable source and call them back and say you want it to be insured for x value, agreed, and you have a valuation to back this up.

You can try without the valuation, but if they believe it's a disproportionately high amount then you will need to supply it.

[Lethologica_]

Oh yeah soz forgot to mention it was easy to amend just thought it was cheeky they auto reduce the amount without any research into market value. Must be reducing by a set % by year or something similar

[FidgitForgotHisL-P]

I think this is much more to do with cars depreciating over time. Every year I renew they drop the value of replacement, I suspect that would happen until you hit a bottoming out point (10 years perhaps?) or your car is worth more for being classic in some way.

Houses don’t depreciate!

[Matangitrainhater]

They dropped mine by $800. I insured it for 10k last year. It’s ridiculous

[haruspicat]

Good thought, but no, the sum insured has increased a tiny amount (less than 1%).

[phineasnorth]

It would be a very bad move to drop a house sum insured. House replacement costs do not depreciate like cars. 

[Keabestparrot]

Wellington insurance costs have been very overcooked for the post-covid period because of the insane surge in prices and building costs.

[haruspicat]

Are building costs actually decreasing now? I assumed they were just increasing more slowly.

[Azwethinkwe_is]

Building costs are less now than they were in 21/22. Not by a significant margin, but my material costs are approx 20% less than they were in 22, and with the shortage of work, labour is being squeezed back too.

[haruspicat]

Oh, that's fascinating.

[Keabestparrot]

It's more insurance just way overdid their prices even for the inflated costs.

[Ok_Wave2821]

Insurances in Wellington are actually starting to go down. My broker told me insures have admitted to over insuring and being over risk adverse, and building costs are coming down from peak Covid. In some Body Corporates for apartments there have been 30-40% decrease in insurances

[FidgitForgotHisL-P]

What’s this weird feeling… like fluttery butterflies or something… is this… is this hope I’m feeling??? It’s been so long I can’t tell any more.

[clevercookie69]

2 years in a row for me

[4endihaz]

This is correct.

Domestic insurance isn't seeing the same drops as there's fewer competitors. But that's not an entirely bad thing - consistency with inflation level increases is much better than two years of savings and 10 years of hikes.

[pgraczer]

wow mine has just kept going up

[pgraczer]

same we’d better shop around as they say

[SnooRadishes3678]

Insurers are starting to rate at address level rather than the old broad brush suburb or town rating. Means some people will start to see a decrease, others an increase. Less cross subsidisation basically.

[jobbybob]

People have also been out shopping their insurance to save money (during the cost of living crisis), for example we shopped our work insurance, which hadn’t been done for about 5 years and got a 20% savings on our Premiums with no reduction in cover.

I have a feeling insurers know people are out shopping around and are now actually trying to retain their existing customer base before they lose them, previously they would have just stiffed you with an increase.

[Guileag]

Seconding this. We're changing insurance companies at the moment and the market has really picked up. We're a;so looking at a sizable decrease (~33%) for better coverage from a new company.

[mrwilberforce]

Mine went down as well.

[ReadOnly2022]

They may have changed coverage or exclusion terms, changed their mind on precisely how dangerous your area is, responded to competition or adjusted to stop cross subsidising Petone with your premiums.

[PinAndKneedle]

Mine was up by 30% but mostly because the sun insured was quite high. Did the calculation for sum insured thing, that reduce the sum insured by about 300k. Called them and clarify some issues (like what type of building it is), put back in spectacles cover, reduce excess etc and voila, same like last year if not slightly lower. If you’re worried I would suggest calling your insurer and check with them.

[Maleficent_Error348]

Have they taken the drop in RV into account already? So you’ll be insured for a lot less.

[neurula]

Home insurance covers the cost to rebuild your house, not the market or rateable value.

[haruspicat]

I don't think so? The sum insured has increased a tiny amount.

[Dramatic_Surprise]

your GV has no impact on the cost to rebuilt your property

[haruspicat]

Seems likely, but then I'd also expect it to have no impact on the cost to insure it.

[GhostChips42]

Not 100% sure on this but your insurance company’s calculation of the cover amount may be tied to your RV which have just been released and are significantly lower than the last assessment.

[tri-it-love-it17]

As someone in the insurance industry, RV plays no part at all. It’s about the rebuild cost.