Not all insurance policies are created equal
Whether it’s major damage caused by a natural disaster or more minor damage caused by a branch breaking your window, Ando has the cover you need to protect your most important asset. We know that every home is different, so our comprehensive policies are customisable, to provide you with exactly the amount of cover you require.
Great policy features
Area-based replacement for fire or explosion
If your house is destroyed by a sudden and accidental fire or explosion (excluding natural disaster fire or wide area damage fire), in most cases we’ll rebuild your house based on the square metres listed on your schedule – regardless of the cost.
If your house is damaged for any other reason, it will be replaced up to the sum insured amount you’ve specified on your schedule. Furthermore, if your house is destroyed by an area-wide event such as a natural disaster, flood, storm or wide area damage fire, and this results in an inflation of building costs, our policies have a built-in price surge cover which may provide some additional cover above your sum insured.
Click here for our guide to calculating square metres and sum insured – so you know what you should include when specifying the size of your house in square metres and what to include when calculating the sum insured value.
Custom cover to suit your needs
Getting the right level of protection is important, so our policies allow you to adapt cover limits and add optional cover if you need it.
Adjustable cover limits- Some of us have acres of space and others, a small inner-city lawn. That’s why our cover limits for landscaping and retaining walls can be adjusted to suit your property.
- Alternative accommodation cover is automatically included in our House policies. This pays for temporary accommodation for you, your family and your pets if you can't stay in your house following an event you claim on. The value of this cover can be increased to suit your needs.
You can customise your policy to include additional cover, like excess-free glass replacement. This means you won’t be required to pay an excess for the accidental breakage of glass or sanitary fixtures.
To find out about our other great House policy features, speak to your insurance broker.
How the cost of house insurance is calculated and why it changes
Before we get started, a few terms explainedThe term ‘premium’ is new to many people when they first start buying insurance. Your insurance premium is simply the amount you pay for cover so when you hear the term ‘insurance premium’, just think ‘insurance price’ or ‘the cost of your insurance’.
Once your cover has been arranged, you’ll receive your ‘policy schedule’ which shows you your premium, as well as the cover you’ve applied for, the limits and optional benefits.
Another term we frequently use is ‘policy’ and this is the document that details what your insurance does and doesn’t cover you for. While there is a lot of information, it’s important to read and understand it as it explains how the insurance works, your responsibilities, and how to make a claim.
What makes up your house insurance premium
Your house insurance premium is made up of a number of costs and what may come as a surprise is that only a portion of what you pay actually goes to Ando.
Here’s a simple breakdown so you know what you are paying for and who it goes to.Costs that we collect on behalf of the Government
Your premium includes levies and GST that all insurers collect on behalf of the Government such as:
Earthquake Commission Levy (EQC)
Fire and Emergency Levy (FENZ)
Tax (GST)
How we work out the cost of your insurance
There’s a lot that goes into calculating your premium to make sure that you are paying a fair price for your insurance cover. Some of the factors that we consider when calculating your premium are specific to your personal circumstances, and some are commercial factors such as the cost of running our business, and the number of claims and cost of claims we receive each year.
Factors that are specific to you or your property
The information you give us about your property such as the construction materials used to build your home, when it was built and the sum insured you have chosen.
The excess you choose. An insurance excess is the amount you agree to pay towards any claim you make.
The sum insured amount you choose to cover the rebuild cost of your home, and the policy options you choose, affect your premium. Optional policy benefits, such as ‘Excess-free glass cover’, can be added to your policy for an additional cost.
Your claims history. Your premium may be higher if you’ve made a lot of claims, compared to having a no-claims history.
Your property’s level of risk which predicts the likelihood of a claim being made in the future e.g. the flood risk of your home.
The risk of your home being damaged by a natural disaster can vary greatly depending on where you live. As a result of greater scientific knowledge from earthquakes and natural disasters in New Zealand, we now have access to more granular data which enables us to drill down into the individual risks of a specific property and assess it on factors such as seismic calculations and flood maps. This extra level of detail means that we can calculate premiums more fairly, as we’re able to assess risk of damage that is unique to each property.
Even houses in the same street can have very different risk profiles. This more tailored approach is often referred to as risk-based pricing and we believe this is the fairest way to price insurance, so customers in low-risk areas aren’t subsidising those in high-risk areas.
If you live in an area with a higher risk of loss or damage from a natural disaster or severe weather event, your premium is likely to be higher than a similar house in a lower risk area. There are also other risks that your house can face, such as fire, burglary, tenant damage, and other sudden events.
Commercial factors, not specific to you or your property
As your premium is calculated based on a number of factors, it could change at renewal even if you haven’t made any changes. We’re constantly reviewing our pricing to make sure it accurately reflects the costs involved in providing insurance cover and that we’re collecting enough premiums to cover future claims. Here are some of the commercial factors that may affect house premiums.
Claims costs
- Increases in claim costs for home repairs and rebuilds. For example, the construction industry has been experiencing huge growth and demand is exceeding available resources, resulting in labour and material costs increasing significantly. As our costs to repair or rebuild homes rise, premiums are adjusted to keep up with these increases.
- The number and severity of claims that we receive each year impacts our average cost of claims – if this increases then so can your premium.
Taxes and levies
- Any changes to the taxes and levies that we collect on behalf of the Government will be reflected in your premium. As you pay 15% GST on the total amount, any increase to your premium means you’ll pay more GST.
Operating and reinsurance costs, and profit
- This covers our day-to-day operating costs and expenses, as well as investment in staff and technology. While we need to make a profit to ensure our business is sustainable for the future, we’re proud that we can offer our customers great value by running a smart and efficient business.
- To ensure that we have enough funding to cover all our customers' claims if there is a major natural disaster, we purchase insurance from large overseas insurers called ‘reinsurance’. Reinsurance costs more in higher risk areas such as New Zealand and changes based on the number of natural disasters and severe weather events around the world. If the cost of reinsurance goes up, then your premium could go up also.
Two of the most significant factors impacting premiums at present, is the increase in the frequency of extreme weather events and increasing reinsurance costs. In 2022, the storms in Auckland set records for insurance claim payments across the industry. In 2023, these records were broken when Auckland experienced unprecedented flooding followed by Cyclone Gabrielle, which caused significant and widespread devastation and loss across the country. The resulting increase in the number and cost of claims from these events directly impact premiums.
Reinsurance costs have also increased for everyone, including New Zealand, based on the increased number of natural disasters and severe weather events that have occurred around the world. Insurance premiums include the cost of reinsurance so an increase in reinsurance costs results in increased insurance premiums.
