Extra cover for earthquake and fire damaged homes
AMP and its home insurance underwriter Vero are offering extra cover to rebuild a home destroyed by natural disaster or fire.
AMP and its home insurance underwriter Vero are offering a policy that gives extra cover to rebuild a home destroyed by natural disaster or fire.
The Vero-led product, called SumExtra, gives 10% additional cover of a customer’s existing policy sum if their home is destroyed by natural disaster, and provides total replacement cover to customers whose homes are destroyed by non-natural disaster, such as fire.
AMP New Zealand chief customer officer Jeff Ruscoe says Vero research suggests around 50% of New Zealand homeowners have not measured the cost of rebuilding their home, which is critical to ensuring they are not underinsured.
“If a natural disaster occurred or fire gutted their house this could leave a significant number of people unable to afford to rebuild their property to its current standard.”
However, to take advantage of SumExtra, customers need to make sure their current sum insured is the same or higher than their home’s estimated rebuild cost, by getting an accurate valuation from an industry professional or a Cordell calculator.
The industry moved to the sum-insured system 18 months ago, which means customers must specify in advance the maximum that insurers will pay out.
The sweeping changes came in the aftermath of disputes from the Canterbury earthquakes, after claimants and insurers disagreed about the meaning of policies.
But despite widespread publicity campaigns, many homeowners remain confused by the changes and have not yet updated their policies.
Confusion has partly arisen due to uncertainty of what a sum insured policy actually represents – the figure should be a cost estimate for rebuilding the home, along with all other permanent improvements, including demolition costs and fees. It should not be confused with a house market valuation or the rates valuation.
AMP and Vero hope this new policy to address under-insurance will spur customers along.
Calida Smylie
Wed, 11 Feb 2015
Wed, 11 Feb 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Extra cover for earthquake and fire damaged homes
45034