Tim Grafton, chief executive of the Insurance Council of New Zealand, says the report shows how risky New Zealand really is.

“Since the last report in 2012, we’ve seen the cost of the Canterbury earthquakes continue to rise, a second major earthquake striking Kaikōura and Wellington and a major flood in Edgecumbe.

“As a risky country, it’s important we remain well-insured,” Grafton says in a press release.

“That means not only ensuring we insure our assets, but making sure coverage of those assets is sufficient to replace them.”

New Zealand has the fourth-highest rate of insurance globally, dropping one place from third in 2012.

But Grafton says this doesn’t necessarily mean that all our assets are adequately insured.

“It’s possible that people are underestimating the cost to replace their assets, which could leave them vulnerable should another major disaster strike.

"We recommend everyone checks their current cover to ensure it’s fit for purpose and will give you what you need in the event of a total loss.”

Grafton says the report is a timely reminder to:

1. Use the calculator on your insurer’s website to make sure your house’s sum insured can cover the demolition and rebuild of it, should it be destroyed in a disaster.

2. Talk to your insurer to make sure your contents cover is sufficient. Your insurer will likely have a calculator you can use to work out how much cover you’d need if you had to replace everything you owned.

3. Check your motor policy to ensure the market value of your car is listed correctly. If you only have third-party insurance, consider whether it would be worth upgrading to comprehensive insurance to ensure your vehicle could be replaced if you had an accident that wrote it off.

The report, released by Lloyd’s of London, looks at non-life underinsurance and insurance penetration data for 43 countries.

First published 31 October 2018

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