What is building insurance in New Zealand?
In New Zealand, building insurance is house insurance for the structure and what is fixed to it. Your belongings need a separate contents cover. Source
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In New Zealand, "building insurance" is house insurance: cover for the structure of your home and the things permanently attached to it, up to a sum insured. Tower's house wording describes it as the domestic buildings you own, and Tower says most lenders require house insurance for the length of a mortgage. Your belongings are a different cover, called contents insurance. This page is part of QuoteHub's house insurance guide.
Building insurance, house insurance and home insurance
The three phrases usually mean the same thing in NZ. Lenders, solicitors and agents ask for "building insurance", while the insurer's own product is called house insurance.
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| You may see | Usually means | Where to read more |
|---|---|---|
| Building insurance | Cover for the structure and fixed items | This page |
| House insurance | The same cover, under the insurer's product name | House insurance hub |
| Home insurance | Often the same cover, sometimes sold together with contents | House and contents, one policy or two |
| Contents insurance | Belongings that are not part of the structure, such as furniture and appliances | Contents insurance |
When a document says "buildings and contents", "buildings" means the structure cover described here. Check the policy wording rather than the product name, because the wording decides what is covered.
What counts as the building in Tower's wording
Tower's house wording covers the domestic buildings you own at the address on your certificate, plus fixtures and fittings, fitted carpet, fences, decks, sealed driveways and outbuildings such as garages and sheds (Tower Standard wording). The full list:
- fixtures and fittings permanently attached, plumbed or wired in;
- fitted floor coverings that are glued, smooth edge or tacked;
- gates, sealed paths, free-standing walls and fences;
- permanently built decks, verandas and patios;
- sealed driveways needed to reach the dwelling or an outbuilding;
- fixed water, heating and septic tanks that are permanently plumbed;
- underground and overhead services to the public mains that you are legally responsible for;
- other domestic outbuildings such as garages, carports, garden sheds and sleep-outs;
- retaining walls essential for the building or for positioning it, plus garden retaining walls up to a set total.
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Two groups sit outside the basic definition. Permanent solar power and solar water heating systems, swimming and spa pools with their pumps and motors, and permanent tennis courts are "special features". They are covered only if they are specified on your certificate of insurance (Tower wording, special features). The same goes for garden retaining walls above the included total, which differs by level:
| Level | Garden retaining walls included in total |
|---|---|
| Standard | $15,000 |
| Plus | $25,000 |
| Premium | $50,000 |
Where common items sit: building or contents
Anything fixed to the house, such as glued carpet, plumbed-in fittings and a detached garage, counts as the building. Loose rugs and movable pools sit in contents. Curtains and blinds are outside the house cover and sit with contents. The table shows how Tower's wording sorts each (Tower Standard wording).
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| Item | Building or contents | Why |
|---|---|---|
| Carpet glued or tacked down | Building | Fitted floor coverings that are glued, smooth edge or tacked are part of the house |
| Loose rug | Contents | Floor coverings not permanently fixed are excluded from the house cover |
| Curtains and blinds | Contents | Drapes and blinds are excluded from the house cover, and Tower's contents wording has a window coverings benefit |
| Plumbed-in heat pump or hot water cylinder | Building | Fixtures permanently attached, plumbed or wired in |
| Detached garage or sleep-out | Building | Listed as domestic outbuildings |
| Rooftop solar panels | Building only if specified | A special feature, covered only if shown on the certificate |
| Swimming pool you could take apart and move | Contents | Excluded from the house cover, and listed in the contents wording as designed to be disassembled or picked up and moved |
A rough test: if an item is fixed in place, plumbed in or wired in, it is probably building. If it is loose or freestanding, it is probably contents. Curtains and blinds are the exception, because the house wording excludes them by name.
What building cover does not include
Tower's house wording leaves out loose floor coverings, drapes and blinds, temporary structures, unsealed driveways, stock fences, trees and plants, and the land itself (Tower Standard wording). The full list:
- floor coverings that are not permanently fixed or glued in place;
- drapes and blinds;
- temporary structures;
- unsealed driveways and paths;
- stock fences, yards and pens;
- swimming and spa pools designed to be taken apart or moved;
- trees, shrubs and plants;
- the land, earth or fill.
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Land matters for the sum insured. Tower says the figure is a rebuild cost that leaves out the value of the land, so a section that has gone up in value does not raise the amount you need.
Loose rugs and freestanding appliances belong in contents cover. House and contents insurance, one policy or two sets the two covers side by side, and what house insurance covers goes through the events that are paid.
The sum insured on a building policy
Building cover pays up to a sum insured that you set, so it should be the cost to rebuild the house, not what it would sell for. Tower counts demolition, debris removal, professional fees and council fees in that cost (Tower).
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The Insurance Council of New Zealand (ICNZ) says working out the figure is the owner's job. QuoteHub's sum insured worksheet explains the method step by step.
A home policy that includes fire cover also brings in cover from the Natural Hazards Commission (NHC, formerly EQC) for damage from earthquake, natural landslip, volcanic and hydrothermal activity, tsunami and fire caused by those.
NHC sets a building cover cap of generally $300,000 plus GST for each natural hazard event, and your private policy covers any amount above that up to the sum insured. For storm and flood, NHC covers the land only, so damage to the building itself falls to your private policy. Natural disaster insurance in NZ explains where NHC stops.
Who needs a different policy
A house policy is built for a home you live in. Rental owners, unit owners with a body corporate and commercial building owners each need a different arrangement.
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- Rental properties. Tower says its Standard, Plus and Premium house policies are designed for owner-occupiers, and that rental owners need its landlord policy. Its wording also asks you to tell it immediately if you rent the house out (Tower Standard wording). See landlord versus house insurance for a rental.
- Units with a body corporate. ICNZ says that under the Unit Titles Act the body corporate of a unit title building must insure all the units and shared property, with the cost built into body corporate fees. Ask for the body corporate's schedule before you arrange anything yourself.
- Shops, offices and other commercial buildings. A commercial building is not a domestic building, so a house policy is the wrong tool. Commercial building cover is a separate product from a commercial insurer or broker, and this site does not cover it.
Do you need building insurance for a new build or a renovation?
The requirement to insure usually comes from the lender. Tower says your bank is listed as an interested party on the certificate, and that a lender may require cover to match or exceed the loan. For a new house, ask your lender and builder when your own cover must start.
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For work on an existing home, tell your insurer first: Tower's wording excludes renovations and alterations apart from its minor alteration benefit, and that benefit does not cover work that needs a building consent. Tower offers separate contract works renovation cover for work in progress. QuoteHub's building and renovating checklist lists the steps, and insurance on settlement day covers the day you take the keys.
Getting a quote from Tower online
Have the address, the year the house was built, what it is built of, the floor area and your sum insured figure to hand. QuoteHub's link opens Tower's online quote, where Tower prices the cover and issues the policy. Other insurers sell house cover too, and what drives the price is explained in how much house insurance costs in NZ.
Questions people ask
Is building insurance the same as house insurance?
In everyday NZ use, yes. Both mean cover for the structure and the items permanently attached to it, with contents insurance as the separate cover for belongings. The wording decides the detail, and Tower's wording covers the domestic buildings you own.
What is the difference between building insurance and contents insurance?
Building cover is for the structure and fixed items such as fitted carpet, plumbed-in fittings, fences and a garage. Contents cover is for loose items such as furniture, clothes and electronics. Tower's contents wording covers items that are kept in or around your house or worn or carried by you.
Does building insurance cover the land?
No. Tower's house wording excludes land, earth or fill, and the sum insured is a rebuild cost without the land value (Tower). NHC covers some land too, and natural disaster insurance in NZ explains where.
Does building insurance cover a fence, deck or garage?
Under Tower's wording, yes for permanent decks, gates, free-standing walls and fences, and domestic garages, carports and sheds, but not stock fences (Tower wording). If your policy is with another insurer, check its own wording.
Do renters or tenants need building insurance?
Usually not, because the landlord insures the building. A tenant's main cover is contents insurance, and Tower's renters page describes it. See QuoteHub's renters insurance guide.
Sources
(10)
- Tower: House Standard wording 09-24
- Tower: House Plus wording 09-24
- Tower: House Premium wording 09-24
- Tower: Contents Standard wording 09-24
- Tower: House insurance
- Tower: Calculating your sum insured
- Tower: Renters contents insurance
- NHC Toka Tū Ake: About natural hazards cover
- ICNZ: House and contents insurance
- ICNZ: Purchasing home insurance in a multi-unit building
Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Reviewed quarterly, when the underlying data is restated. General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.
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QuoteHub is a Tower partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.
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