Consumer NZ: house insurance becoming increasingly out of reach

Consumer NZ has revealed that house insurance costs have risen by 916% since 2000, according to Stats NZ. 

The consumer watchdog is calling on central government to take the lead and work with local government and insurers on a national solution to ensure insurance remains available and affordable. Consumer wants to see the development of a climate adaptation framework, increased oversight of the insurance industry and increased consumer protections. 

“Insurance is getting harder to access and the need for it will only grow,” says Rebecca Styles, Consumer investigative team leader and author of the report ‘Will you be able to get home Insurance by 2035?’ 

“If we don’t act now, it’s entirely possible that many New Zealanders won’t be able to get insurance at all by 2035,” says Styles. 

A crisis of cost and access 

Among those without cover, more have cancelled or not renewed their house insurance because of cost. Up from 7% in 2022 to 17% in 2025. 

“Insurance now ranks as one of New Zealanders’ top four financial concerns, behind housing, food and household debt,” says Styles.  

“Our research shows people are dropping cover or being priced out entirely, and this will only get worse without serious intervention.” 

The report includes major concerns with how the market is working, noting:  

• low trust in insurers, with dissatisfaction in claims handling and poor communication 

• a lack of transparency in risk-based pricing, leaving homeowners unclear about what they're paying for 

• limited ability to shop around, especially in high-risk areas where quotes are hard to get 

• insurers' profits rebounding, with trans-Tasman companies appearing to be charging New Zealanders more than Australians for equivalent cover. 

Consumer is calling for action on five fronts 

1. An effective government-led national climate adaptation framework 

This framework should identify homes at risk and outline mitigation or retreat options. Nearly three-quarters of New Zealanders agree such a plan is urgently needed. 

2. Greater oversight of the insurance industry 

• The FMA should investigate whether risk-based insurance pricing is being applied fairly. 

• The Commerce Commission should carry out a market study into competition and consumer choice in the house insurance sector. 

3. Improved transparency and claims standards 

• Insurers should clearly show how risk affects pricing and explain policy and price changes when policies are renewed. 

• There should be set time frames for settling claims, with consequences for unreasonable delays. 

4. Stronger consumer tools and innovation 

• Improve access to online quotes, comparison tools and risk data for homeowners. 

• Insurers should incentivise resilience, for example, by rewarding homeowners who take steps to reduce flood risks around their homes. 

5. A stronger national safety net 

• The government should ensure the Natural Hazards Commission is future fit to serve communities facing the challenges of climate change. 

“If insurance becomes a luxury only available to a privileged few, the impacts on communities, our economy and society will be severe. We need a plan, and we need to start implementing that plan now.” 

The Brian Gaynor Initiatives – Business Writing and Journalism Excellence Award made it possible for Consumer’s investigative team leader Rebecca Styles to pursue this topic.