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What kind of insurance do I need in New Zealand?

If you’re moving to New Zealand, it’s a good idea to take out some level of insurance to protect yourself while you are here. But what type of insurance do you actually need, and what can you afford to avoid?
By · January 25, 2024
What kind of insurance do I need in New Zealand?

Whether you’re looking at buying a car or moving into a new home, insurance can give you peace of mind when it comes to protecting yourself against accidents, storms or even break-ins.

If you’re moving to New Zealand, it’s a good idea to take out some level of insurance to protect yourself while you are here. But what type of insurance do you actually need and what can you afford to avoid?

Whether you are travelling, studying, or moving to New Zealand permanently, follow our guide to understand which type of insurance is right for you.

Travel Insurance

New Zealand is considered a very safe country to travel to. The locals are friendly, crime rates are relatively low, and Kiwis pride themselves on their friendly, welcoming natures. But that doesn’t mean you should skip taking out travel insurance.

It’s always a smart idea to take out travel insurance when you are travelling overseas, and New Zealand is no different. Travel insurance policies will cover you for the loss or theft of your belongings, medical treatments (New Zealand has a national healthcare system, but foreigners will have to pay out of pocket), cancellations that result in a lost deposit, emergency flights and personal liability while you are travelling.

Make sure you take out an insurance policy while you are in your home country. Most insurers will require you to buy coverage before you leave. Some insurers will cover policyholders while they are abroad, however, you may have to wait 72 hours before your insurance policy begins.

Make sure you read your insurance policy before you leave home. Some policies won’t cover you for accidents from extreme sports or adventure tourism — two things New Zealand is well known for!

How can I keep my belongings safe while in New Zealand?

Even though New Zealand is a safe place to travel, there are still preventative measures you should take to keep your belongings safe while you are here.

  • Lock your bags or use a lockable storage locker if you are sharing dorm rooms

  • Don’t travel with a lot of cash. Debit cards and credit cards are widely accepted

  • Don’t leave valuables in your car overnight or sitting on the front seat

  • Keep your bicycle locked and make sure to wind the lock around the bike frame

Health insurance

If you are moving to New Zealand, you may want to consider taking out health insurance. However, there are a few things to know before you do.

If you injure yourself as the result of an accident, ACC provides no-fault insurance cover regardless of whether you are a citizen or not.

You may be eligible for subsidised healthcare when you first arrive in New Zealand if you are:

  • a New Zealand citizen / permanent resident

  • an Australian citizen / permanent resident who’s lived, or intends to live here for 2 years

  • a work visa holder and are eligible to be here for at least 2 years

Publicly funded healthcare covers inpatient and outpatient treatment at public hospitals, hospital care if you have an accident, maternity care and birth, fertility services, disability support services, and subsidised prescriptions. However, this doesn’t mean you are automatically entitled to all of the above services. Some services have criteria you need to meet, and it always pays to do your research if you have a specific type of health problem or require specialist care.

Who can take out private health insurance?

To take out private health insurance, you must be eligible to use the public health system. Otherwise, you’ll need to take out travel insurance with healthcare coverage. Although many types of healthcare are covered by either ACC or our publicly funded system, private insurance can help you pay for costs that fall outside of this, such as:

  • Dental treatment

  • Prescription glasses

  • Elective surgery

  • Private hospitals

  • Fast-tracked care

Home Insurance

If you’re thinking of buying a home in New Zealand, you will need home insurance. In fact, most lenders require you to have insurance for a property when taking out a mortgage.

Home insurance is calculated on a ‘sum insured’ basis, which means the coverage you receive is based on a specified amount determined when you took out your insurance policy. This represents the maximum amount you can claim if your house is damaged and needs to be rebuilt.

Even if the value of your home goes up over time, your insurance will only be covered for a fixed amount. You can increase your mortgage coverage in the future if your home value has increased. Your insurance payments will also increase as a result.

In New Zealand, the Earthquake Commission (EQC) provides natural disaster insurance, specifically focusing on earthquake damage to residential properties. EQC earthquake insurance is a government-funded scheme that helps homeowners recover from the financial impact of earthquake damage.

Contents insurance

Whether you are a homeowner or a renter, contents insurance will cover the cost of any possessions that need to be replaced due to damage or loss.

It’s important to note that for homeowners, home insurance does not cover your furnishings or personal belongings. As a renter, your landlord is responsible for taking out home insurance on your dwelling but this doesn’t cover your personal possessions within the home.

Contents insurance covers things like furniture, appliances, clothing, sports equipment, rugs, carpets and curtains. Most policies come with a claim limit. You can choose whether you want to take out a claim that would cover the value of your possessions if everything needed to be replaced with brand-new items.

Alternatively, you can save money by taking out contents insurance with an indemnity policy. This only replaces items to the value they were in before loss of damage occurred.

It’s always a good idea to take photos of your valuable items or keep receipts so you can send them to your insurer if you need to make a claim.

Natural disaster insurance

Natural disaster insurance is covered by EQC and by your home or contents insurance. You shouldn’t need to take out specific natural disaster insurance in New Zealand. EQC also covers damage caused by:

  • earthquakes

  • natural landslips

  • volcanic eruptions

  • hydrothermal activity

  • tsunamis

  • storms and floods (but only for damage to land)

  • fire (if caused by the above natural disasters).

To qualify for EQC cover, you will also need to have a domestic house policy that insures against fire damage. All domestic house insurance policies currently include fire protection insurance.

Car insurance

While it’s not compulsory to take out vehicle insurance in New Zealand, it is recommended that drivers take out ‘third party insurance’ as a minimum standard.

There are three types of car insurance policies:

Third Party Property Damage: this covers you against the damage caused to someone else’s vehicle or property and is the most affordable type of insurance. You won’t be covered in the event of any damage caused to your own vehicle.

Third Party, Fire and Theft: As well as third-party coverage you’ll also be covered for the theft of your vehicle or damage caused by a fire.

Comprehensive: This is the most expensive and most comprehensive vehicle coverage and covers you against the loss of, or damage to, your vehicle. You’ll also be covered for damage to other people’s vehicles or property regardless of whose fault the accident was. Many policies also include the cost of salvaging or towing your car and may include membership to AA, which can cover the cost of an AA callout.

Income insurance

Income insurance isn’t super common in New Zealand, but you may want to take out this type of coverage to protect you in the case of disability or injury. New Zealand has a robust social welfare system. However, disability coverage and unemployment benefits don’t generally go very far. Income insurance can help you protect a percentage of your income if you are unable to work.

Income insurance usually covers up to 75% of your “pre-disability income” for a limited amount of time. Claim payments are based on how much you earned prior to taking out coverage. Even if your income increases, you’ll only be paid out based on the amount you insured your income for. Income insurance is generally only recommended for people with dependants.

Life insurance

If you're a resident of New Zealand, you are eligible to take out life insurance. This policy offers a lump-sum payment to the policy owner in the event of the insured person's death or terminal illness, where the prognosis is 12 months or less to live.

Coverage extends to any cause of death, excluding suicide within the initial 13 months of the policy. It's important to note that claims may be declined if there's a significant non-disclosure of an illness history on the application form. Full transparency in providing health information during the application process is important.

It’s important to do your research before taking out a life insurance policy. Not all policies are created equal, and there are many examples of people paying ten thousand dollars over their lifetime only for their families to receive inadequate coverage. It can be a good idea to use a mortgage broker to get you the best deal.

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