You’ve calculated how much you can afford to spend, chosen a lender, been to countless inspections, missed out on a home or two and finally signed the dotted line for a property that ticks all the boxes.
Congratulations! Buying a home is one of the most exciting purchases you can make.
With furniture to buy and appliances to research, insurance is probably not the most pressing thing on your mind, but it’s something you shouldn’t ignore either. And, it’s not just your property you should be looking to protect.
Like lots of things when buying a home, insurance can be confusing. So to help, we’ve debunked nine of the most popular insurance myths for new home owners.
Home insurance
Your home is one of the biggest purchases you will ever make in your life and it’s one of your most valuable assets. Home insurance is designed to protect this asset from unforeseen circumstances.
Myth one: Home insurance is not mandatory
Truth: If you have a mortgage over your home, then generally, your lending institution will require you to take out a home insurance policy as part of your home loan agreement.
Myth two: Insurance will replace my house if there is damage by fire or other circumstances
Truth: In recent years, home insurance in New Zealand has changed considerably and is now typically calculated on a ‘sum insured’ (i) basis. This means that if your home needs to be rebuilt, the insurer will pay out up to the maximum sum that you specify when you take out your policy.
Myth three: Sum insured is dictated by the market value of a house
Truth: Sum insured is actually defined by the likely cost to rebuild your house (ii) and includes the cost of things like demolition and debris removal, land value, location and market factors. You can calculate what it could cost to rebuild your home via needtoknow.org.nz. (iii)
Contents insurance
Whether you’re a renter or home owner, it’s important to protect the things that matter inside your home. Contents insurance covers the financial cost of repairing or replacing your household possessions and furnishings like your TV, jewellery and furniture.
Myth four: All of my possessions and furnishings are covered under contents insurance
Truth: This will depend on the type of policy you take out. Most contents policies (iv) have claims limits (sub-limits), especially for valuables, jewellery, money, documents and collections. Different policies have different restrictions and there may also be specific conditions to the cover.
Life insurance
As a home owner, it’s important to protect yourself and your family from any unexpected events. The purpose of life insurance is to provide your loved ones with financial security if you were to be diagnosed with a terminal illness or pass away.
Myth five: I’m young and healthy; I don’t need life insurance
Truth: Life insurance isn’t just for the elderly or unwell. Even if you’re young and healthy, the unexpected can happen which is why it’s important to protect your lifestyle and cover your debt.
Myth six: It’s OK to buy and forget
Truth: Your life is dynamic and circumstances can change whether that’s getting married, having kids or buying a house. That’s why you should review your life insurance policy regularly to ensure it caters to your changing circumstances.
Private health insurance
Your home might be the biggest purchase you’ve ever made, but your health is by far your most valuable asset. Health is wealth, which is why this type of insurance is designed to help you meet the costs of medical treatment and provide you with more control over where and how you are treated.
Myth seven: The public health system will look after me
Truth: While emergency treatment in the public healthcare system is great, things can get tricky if you require non-emergency treatment – like cancer care, specialist treatment and surgery. Wait times for treatment may be longer than ideal and you don’t have the choice in who treats you.
Myth eight: Anyone can get private health insurance in New Zealand
Truth: To be able to take out private health insurance in New Zealand (v), you must be eligible for the public health system. Generally speaking, you are eligible for public healthcare if you are a citizen, resident or hold a work visa valid for two years or more from the date you arrive in New Zealand. There’s other criteria that applies to being eligible that’s detailed here.
Myth nine: If I get sick, the ACC will cover the cost
Truth: ACC (vi) provides no-fault insurance cover to everyone in New Zealand for injuries resulting from accidents. However, it won't cover things like illness, conditions from deterioration or ageing and emotional issues. These may be covered by private health insurance.
How nib can help
Owning your first home is a rewarding step in the lives of thousands of Kiwis and protecting your property is important. But don’t forget your most valuable asset – you and your families’ health. By keeping things simple, no jargon, and no fuss, nib can help when it comes to choosing the best health cover to suit your needs. To explore your options with nib’s variety of policies or to book a call back from a helpful nib consultant, click the Click and Compare button below.
Sources
[i] https://sorted.org.nz/guides/protecting-wealth/insuring-our-homes/
[ii] http://need2know.org.nz/whats-happening/what-is-rebuilding-cost/
[iii] http://needtoknow.org.nz./
[iv] https://www.newzealandnow.govt.nz/resources/insurance-in-new-zealand-a-guide-for-migrants
[v] https://www.nib.co.nz/refer/7KztMVK8tagIOaQq2uwEc6
[vi] https://www.acc.co.nz/im-injured/injuries-we-cover/what-we-cover/