A growing number of New Zealanders are questioning whether they can continue to afford insurance as costs spiral well beyond income increases. New data from Stats NZ shows that by March 2024, house insurance premiums had jumped nearly 25% compared to the previous year. Contents insurance rose by almost 28%, while car insurance followed closely with a 23% increase.
The spike in premiums is occurring against the backdrop of a still-unfolding cost of living crisis. A leading economist told RNZ’s Checkpoint that while inflation has eased slightly, everyday costs remain stubbornly high – food prices, for example, climbed 4.4% over the past year, the steepest rise since late 2023.
According to insurance comparison site Quashed, general insurance costs – comprising one house, one contents, and one comprehensive car policy – have risen by 51% since 2022. House insurance premiums alone are up 53% over that period, while car insurance has surged by 56%, and contents insurance by 39%.
Though premiums have shown signs of flattening in recent quarters, Quashed CEO Justin Lim says the financial strain remains. “When you’ve not had to make a claim for years on end and then you see your bills jump, it is pretty hard to swallow that,” Lim told interest.co.nz.
Regional disparities are also striking. In Wellington, the average house insurance premium is now $4,589 – more than twice the average in Auckland at $2,111. Some Wellington homeowners are reportedly facing premiums above $10,000 for million-dollar properties.
Jan, one of three women who shared their stories with Checkpoint, said insurance had become one of the most burdensome expenses in her budget.
“It goes up every year, no matter what,” she said. “It’s rising like five or six times faster than our incomes.”
After losing her husband – a high-income earner – in December, Jan has had to reassess her spending while adjusting to a single income.
“It’s pretty tough. It’s like if I add up my insurance and my health insurance and my rates. It’s about 25%, 30% of my income just for those three things,” she said.
Quashed has also noticed a trend of New Zealanders looking beyond the big-name insurers. More users are adjusting their policy details, experimenting with excess levels, and considering smaller insurance providers to find better deals.
“They are playing around, trying to see if they can save and they probably self-insure a little bit more,” Lim said.
As many households continue to grapple with stagnant wages and rising living costs, dropping or downsizing insurance might seem like the only way to stay afloat – even if it means taking on more risk.
How should residents navigate the rising costs? Share your insights in the comments below.
