What’s with insurance in 2024? Five things to do when your premiums surge

Insurance plays an essential role in keeping us as resilient as possible in case the unthinkable happens. Over the past few years, though, household insurance costs have risen by more than 50%, which makes keeping up with premiums a real struggle, and in the last year alone, costs for insuring your car, home and belongings have jumped around the country. Some homeowners (especially in the Wellington area) have even seen their home insurance bills leap from $3000 to more than $9000 annually for certain properties! Unbelievable. 

Let’s take a closer look at just how much insurance premiums have increased, surprising regional differences, and what you can do about it. 

Car insurance premiums have skyrocketed 

Insuring your vehicle is getting much more expensive in New Zealand. The latest data from Quashed.co.nz (the online insurance-comparison site) shows the national average yearly premium for car insurance hit $1309 in the first quarter of 2024. That’s a massive 40% spike from the $935 average just one year earlier! 

The pain’s felt differently in different regions. In Auckland, the average yearly car insurance cost is now $1446, or about $120 per month. In Wellington, it's $1113 annually ($93 monthly), and in Canterbury, car owners are paying around $1173 per year ($98 per month) on average. 

Boosting your excess can help 

Those figures represent the typical cost for a comprehensive car insurance policy. To try to keep premiums down, some consumers are opting for higher excess levels on their policies – which means they’ll be paying more out of their own pockets if something happens, but at least it brings the monthly premiums down. For example, Wellingtonians are choosing an average excess of $767 for car insurance, compared to $575 in Auckland and $516 in Canterbury. 

Different policies can have dramatically different premiums 

Consumers can end up paying a lot more for their car insurance, depending on the insurer they choose. In 2023, the average difference between the highest and lowest premium quotes was $379; in 2024, that gap has grown to $610 on average. 

This highlights how important it is for us all to diligently shop around and compare car insurance rates from multiple companies. You could be paying hundreds more per year by sticking with your current insurer versus switching to the most affordable option. 

Home insurance rates are surging, too 

Car owners aren’t the only ones facing sticker shock on their insurance bills. The cost of home insurance in New Zealand has climbed 25% year on year, from an average of $2243 in 2023 to $2794 in 2024. 

Auckland homeowners are paying $2004 per year ($167 monthly) on average for home insurance. In Wellington, the average annual premium is a steep $4009 ($334 per month) – more than double the rate in Auckland! Canterbury falls in the middle at $2891 yearly ($241 monthly). 

To try to offset these massive increases, many Wellington residents are raising the excess levels on their home insurance policies. This can provide some premium savings, but also means taking on more risk that they’d pay for if something happened. 

As with car insurance, there’s now a huge variance in the home insurance rates being quoted by different insurers in New Zealand. In the first three months of 2024, the average difference between the highest and lowest premium quotes had swelled to $894 per year. 

Even contents insurance is climbing 

Alongside car and home insurance going up, up, up, the cost of contents insurance, which protects your personal belongings and household items, has risen 24% around the country in the past year. The average Kiwi now pays $851 per year (around $71 monthly) to insure their contents. In Auckland, it’s $754 annually; in Wellington, it's $1191; and in Canterbury, the average is $824 per year. 

According to Quashed.co.nz data from the first quarter, there’s also a considerable $462 difference, on average, between the highest and lowest contents insurance quotes. This reinforces how vital it is to shop around for contents insurance as well, to find the best possible rates. 

Here’s how you can save on insurance costs 

With premiums leaping across the board, many Kiwis are looking for ways to keep their insurance costs under control. Here are some tips that can help: 

• Shop around and compare rates frequently. Prices of insurance products change all the time, so the approach of simply renewing with your current provider each year can get very expensive. Services such as the Quashed Market Scan can help you quickly compare rates from multiple insurers. 
• Adjust your coverage levels. You may be able to save by increasing deductibles or excess levels, or by tweaking your coverage limits and options. Just be careful not to under-insure and leave yourself exposed. 
• Consider bundling your policies. Some insurers offer discounts if you bundle multiple policies – like car, home and contents insurance – together. 
• Improve your home security. Installing alarms, cameras or other security devices can help reduce your home and contents insurance premiums. 
• Build your no-claims history. The longer you can go without a claim, the lower your premiums will be. Drivers and homeowners with long claim-free histories tend to get better rates. 

Insurance prices have put a real squeeze on household budgets, especially for those on a fixed income or for whom money is tight, but there’s good news: the Quashed data shows that by taking the time to shop around, the average household can potentially save $2000 to $3000 per year on their total insurance costs. With premiums rising so sharply, those savings are becoming ever more meaningful. 

Although the increases are daunting, being savvy about your cover and taking advantage of tools to compare rates can help you keep your policies affordable.