As the cost of living continues to climb in New Zealand, many households are facing tough financial decisions. One area where this pressure is acutely felt is in insurance coverage. Rising premiums have led some Kiwis to cancel or reduce their insurance policies, potentially leaving themselves vulnerable to unforeseen events.
Recent data highlights the financial strain on New Zealanders regarding insurance:
These statistics underscore a troubling trend where essential protections are being sacrificed due to financial constraints.
Industry professionals and financial advisors have weighed in on the implications of this trend:
Rebecca Styles, investigative team leader at Consumer NZ, emphasizes the importance of maintaining some level of coverage:
“We urge New Zealanders to review their current level of cover and shop around. It’s likely you’ll find a better deal and can maintain some level of protection—which is better than no cover at all.” - Consumer NZ
Justin Lim, CEO of insurance comparison site Quashed, notes the variability in premiums:
“Between $300 and $600 [a year] is the average price difference we're finding between insurers for the same car.”
These insights suggest that while premiums are rising, opportunities exist to mitigate costs through informed decisions.
For those looking to balance financial pressures with the need for insurance, consider the following approaches:
1. Increase Your Excess
Opting for a higher excess can lower your premium. For instance, increasing your house insurance excess from $500 to $2,000 could save you approximately $314 annually. However, ensure you can afford the higher out-of-pocket cost in the event of a claim.
2. Bundle Policies
Combining multiple insurance policies (e.g., home and contents, or car and health) with a single provider often results in discounts. This consolidation can also simplify the claims process.
3. Enhance Security Measures
Improving your home's security—such as installing alarms or deadbolts—can reduce the risk of theft or damage, potentially leading to lower premiums.
4. Review and Adjust Coverage
Regularly assess your insurance needs. If certain coverages are no longer necessary, adjusting or removing them can decrease your premiums.
5. Consult a Financial Adviser
Before making significant changes to your insurance policies, seek advice from a financial adviser. They can provide personalized recommendations based on your circumstances.
Haven
While the rising cost of living presents challenges, it's crucial to find a balance between financial constraints and essential protections. By proactively managing insurance policies and seeking expert advice, New Zealanders can maintain necessary coverage without undue financial strain.