Changes to Home Insurance Premiums

New Zealand has many natural hazards, or risks, including floods, earthquakes, and landslips. Some places are riskier to live than others, as they experience more natural hazards.  

AA Insurance wants to protect the homes of Kiwis long term, so has had to consider the way we calculate premiums to continue to provide affordable insurance in New Zealand.

Previously, the difference in risk arising from natural hazards across the country was often balanced by pooling the risk and evenly sharing the costs across customers. As New Zealand continues to experience earthquakes and more frequent and severe weather events, our claims and reinsurance costs have also increased. We must now factor in the changing risk environment when we calculate premiums and ensure we are maintaining an appropriate level of reinsurance cover to pay all insurance claims in case of a large-scale event.

Instead of evenly ‘sharing the load’ of insurance costs across customers, our premiums will start to more accurately reflect the future cost of covering an individual property. So, if you live in an area prone to natural hazards such as earthquakes and floods, you could pay more for your premium than those living in lower risk areas.

Frequently asked questions

You’ll find answers for many of your questions here. If you have a more specific question or want more detail, please contact us.

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