A person who rents will have a different policy to someone who owns their home. A renter will purchase insurance to cover the contents of the home, while the home owner’s policy will cover the structure as well as the contents.
There are three types of home and contents insurance in New Zealand. The following descriptions have been supplied by The Insurance Council of New Zealand:
Total replacement (no sum insured)
If your home is destroyed, the insurance company will rebuild the house and pay all fees involved in the process (architect, site clearance fees). This type of insurance policy is usually only available for homes that are owner-occupied, in good condition, or under a certain age.
Fixed sum insured (replacement)
This means you and your insurance company agree on the sum insured, and the company will rebuild your house up to that limit if it is totally destroyed. Any costs that would exceed the fixed amount will be the responsibility of the policy holder.
Indemnity policies (present day value)
This is what the house was worth just before the loss occurred. It is roughly equivalent to the market value or replacement value of the house (excluding the land).
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