How can you pay less for house insurance in NZ without losing cover you need?

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-07 · 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.

You can usually pay less for house insurance by carrying more of the risk yourself (a higher excess), paying once a year, keeping your details accurate and sizing the cover to your actual house. What you cannot change is the government's share. The Insurance Council of New Zealand (ICNZ) says the Natural Hazards Insurance levy is about 24% of a premium, the Fire and Emergency levy around 5% and GST about 13%, so the savings come out of the insurer's own portion.

Where your premium goes, and what you can touch

ICNZ's breakdown of a home insurance premium is the quickest way to see where a saving can come from. Only the last row responds to your decisions.

Because the levies and GST are percentages of the premium, a lower premium also lowers the dollar amount of the levies. The full picture is in what sets the price of house insurance.

The levers, and what each one costs you

Work through them in that order at renewal. The first three cost you nothing in cover, and the last two need a closer look at the wording.

Raise the excess, but only to a number you could pay

The excess is the part of a claim you pay yourself. Tower's standard house excess starts at $400, and it says choosing a higher one could lower your premium (Tower). The test is practical: if a burst pipe or a storm happened next month, could you find the excess without borrowing? If not, a bigger excess is a false saving.

Two cautions apply. The excess is charged on each claim, so a higher figure costs more if the house has several small ones. And extra excesses can sit on top. At Tower, a house left empty for more than 90 consecutive days has its cover limited from day 91 and carries an additional $1,000 excess on a claim for loss to the house (Tower). That matters if you move out before a sale settles or spend a long season overseas, so tell your insurer before the gap starts. Check the schedule, not just the headline excess.

Pay once a year if you can

If you pay by instalments, ICNZ says it may cost you more in some cases and suggests asking your insurer about options (ICNZ). Tower says switching to annual payment at renewal may save up to 10% (Tower). That is Tower's claim about its own policies, so ask any insurer for the difference on your policy before you change anything. If a lump sum is the obstacle, the saving is not worth a missed payment.

Get the sum insured right in both directions

The sum insured should reflect what it would cost to rebuild, not the market value or the rateable value. Tower says the figure needs to cover demolition, debris removal, professional fees and council fees as well as the build itself. ICNZ warns that setting it too high may mean paying too much, because insurers are not required to pay more than the actual cost of rebuilding (ICNZ). The same page warns that setting it too low may leave you rebuilding to a lesser size or quality, or paying part of the work yourself.

So the saving here is accuracy, not a smaller number. Tower says to reassess as the home changes through renovations (Tower), and ICNZ says to tell your insurer about improvements. A recent extension or a new kitchen pushes the right figure up. An out-of-date padded figure from years ago may push it down. The method is in how to work out your sum insured, and insurance when building or renovating covers work in progress.

Location, risk and the answers you give

Location is the lever you cannot pull after you own the house, but you can see it coming. Tower says it assesses the potential risk of earthquakes, floods, landslides and sea surges at your specific address when you buy or renew, and that this forms part, but not all, of the premium. Where no address-level data exists, it uses community-level data (Tower). Tower's own savings article suggests checking risk-based pricing before you buy a property (Tower). If you are house-hunting, get a quote on the address before you make an offer. For how hazards affect cover, see natural hazards and flood cover.

What you can control is what you tell the insurer. ICNZ says giving additional information about your specific risk may allow a premium to be reviewed (ICNZ), and security devices are its example. Ask which features the insurer actually rewards, because not every one changes the price.

Accuracy matters more than any discount. If you rent the house out, Tower says its Premium, Plus and Standard house policies are designed for owner-occupiers and that you need its landlord policy instead (Tower). A saving built on leaving that out can come undone at claim time. Landlord insurance versus house insurance explains the difference.

Cuts that save little and cost a lot

• Dropping a level without reading the limits. Tower describes its Standard house policy as its most affordable and says it covers some essentials. For hidden gradual water damage, its limits are $1,000 on Standard, $2,000 on Plus and $3,000 on Premium (Tower). For an older house with ageing pipes, that gap may matter. See roof leaks and gradual damage.
• Cutting cover below what your lender needs. Tower says most New Zealand lenders require house insurance for the full length of a mortgage, want the bank listed as an interested party, and may require cover to match or exceed the loan until it is paid off (Tower). Check your loan terms before lowering the sum insured.
• Counting on wear and tear or pets. Tower says its house insurance does not cover normal wear and tear or damage caused by pets (Tower). No level of cover fixes that, so a higher price does not buy it.
• Comparing unlike quotes. ICNZ says each insurer offers products that differ from the others (ICNZ). A lower quote with a lower sum insured, higher excess or tighter limits is not a like-for-like saving.

Tower's savings article also suggests reviewing optional benefits and keeping the ones you would actually use (Tower). The Tower house insurance explainer walks through its three levels.

Bundles and buying a house

Do not assume a bundle is cheaper. Tower no longer offers a multi-policy discount on new policies (Tower). It does say you pay only one excess when you claim on several eligible policies for a single event, with the highest excess applying (Tower). Whether one policy or two suits you is covered in home and contents insurance, one policy or two.

If you are buying, line up the insurance before settlement, because cover needs to be in place when the house becomes yours. Insurance on settlement day covers the timing, and first home buyer insurance has more.

Getting a quote from Tower online

Have the address, build year, construction, floor area and sum insured ready. QuoteHub's link opens Tower's online quote, Tower's own tool, where the price is built from your details. Other insurers sell house cover too. If you get a second quote, use the same sum insured, excess and level of cover so the two are like for like.

Questions people ask

Does a higher excess really lower my premium?

Generally yes. ICNZ says a higher excess will in general mean you pay a lower premium (ICNZ). The cost is that you pay more yourself whenever you claim, so pick an amount you could cover on the day.

Is it cheaper to pay house insurance annually?

It can be. ICNZ says paying by instalments may cost more in some cases (ICNZ), and Tower says annual payment at renewal may save up to 10% (Tower). Ask your own insurer for the difference, because it varies.

Will a home alarm or better locks cut my premium?

Possibly. ICNZ says you may receive a discount for security devices such as window locks and deadlocked doors (ICNZ). Ask the insurer which devices it rewards before you spend money on them.

Can I insure my house for less than rebuild cost to save money?

It is risky. ICNZ says that if the sum insured is too low you may have to rebuild to a lesser size or quality or pay for some of the work yourself (ICNZ). The better saving is to remove padding, so the figure matches the real rebuild cost.

Can I drop house insurance if my mortgage is nearly paid off?

Not while the lender requires it. Tower says most New Zealand lenders require house insurance for the full length of a mortgage (Tower). Once the loan is cleared, the decision is yours, but the house is still the largest asset most people hold, so the rebuild risk stays.

Do government levies change if I shop around?

No. The Natural Hazards Insurance levy and the Fire and Emergency levy are collected by every insurer for the Government, and GST is added on top (ICNZ). Any difference between insurers sits in the part of the premium each insurer calculates for itself.

Cite this page QuoteHub NZ (2026). How to Pay Less for House Insurance in NZ. www.quotehub.co.nz/house-insurance/pay-less-for-house-insurance-nz. Updated 2026-10-07.

References

• ICNZ: What makes up your premium?
• ICNZ: House and contents insurance
• Tower: House insurance
• Tower: How to save on your insurance (published 18 June 2025)
• Tower: Multi-policy discount

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