# DI-C-K-01: My insurer paid for my stolen belongings but took money off for wear and tear. How do I check whether that deduction is right?

Collected 11 October 2026

[Home and contents insurance study](https://nzbrands.ai/research/insurance/home-contents-insurance)

## ChatGPT

Answer ID: b724a0fd-1e04-42c9-8362-92ca2f940199

In New Zealand, you can check whether your insurer’s wear-and-tear deduction is correct by asking how they calculated it, what policy wording allows it, and whether they used a reasonable estimate of your belongings’ age and condition.

A deduction isn't automatically wrong just because your belongings were stolen rather than damaged. But you also shouldn't have to accept an unexplained percentage or an estimate that doesn't match your actual items or policy.

## 1. Check these four things

- Your policy wording: Find the section on stolen or lost belongings, contents cover, depreciation, and how claims are settled. Check whether you're entitled to replacement value, current value, or another amount.
- The calculation: Ask for the original value of each item, the deduction applied, and the final amount paid.
- The age and condition: Check whether the insurer used the correct purchase date, age, and condition. An item in excellent condition may not justify the same deduction as a heavily worn one.
- The depreciation rate: Ask how the insurer selected the rate and useful lifespan. A flat deduction of, say, 30% across very different items may deserve closer scrutiny.

The key distinction is that the insurer should be able to explain how the deduction follows from your policy and the facts of your claim.

## 2. Recalculate the deduction

Use this simple table to check each stolen item.

| Item | New replacement cost | Deduction | Payout |
| --- | --- | --- | --- |
| Laptop | $1,500 | 40% ($600) | $900 |
| Jacket | $300 | 20% ($60) | $240 |
| Bicycle | $1,000 | 30% ($300) | $700 |

Illustrative figures only, not recommended depreciation rates.

For each item, ask:

- What value did the insurer start with — the original purchase price or the current cost of a comparable replacement?
- What percentage did they deduct, and why?
- How old did they assume the item was?
- What evidence or depreciation schedule supports that calculation?

Also check whether your policy provides replacement-value cover for that particular item or only its present value. Some New Zealand policies offer replacement cover for most belongings but use present value for certain categories. [How to get the best house and contents insurance](https://www.consumer.org.nz/money/insurance/house-and-contents-insurance/guide)[Contents insurance | Quote and buy online](https://www.anz.co.nz/personal/insurance/contents-insurance/)

## 3. Ask your insurer for a written breakdown

You can send them this message.

Email

Subject
:   Request for explanation and review of depreciation deductions

Kia ora,

Thank you for settling my claim for my stolen belongings.

I would like to understand and verify the wear-and-tear or depreciation deductions applied to my claim.

Please provide, for each affected item:

- The valuation used before the deduction.
- The age and condition attributed to the item.
- The depreciation percentage or amount applied and how it was calculated.
- The basis for the calculation, including the relevant policy wording and any depreciation schedule or useful-life assumptions used.
- An explanation of whether the item is covered on a replacement-value or present-value basis under my policy.

Please also confirm whether the deductions have been reviewed against the specific age and condition of my belongings.

Once I have this information, I can check the calculations and identify any amounts that may need to be reconsidered.

If any deduction was applied incorrectly or does not reflect my policy entitlements, I would appreciate a reassessment of the settlement.

Ngā mihi

## 4. If the deduction still looks wrong

You can challenge it through your insurer's formal complaints process. Explain exactly which deductions you dispute and provide any supporting evidence, such as receipts, photographs, purchase records or comparable replacement prices.

If the insurer doesn't resolve the issue, you can contact its independent dispute resolution scheme. Depending on which scheme your insurer belongs to, you may be able to get a free, independent review. See the New Zealand Government's [guide to complaining about a financial service provider](https://www.govt.nz/browse/consumer-rights-and-credit-record/how-to-complain/complain-about-your-financial-service-provider/). [Complain about your financial services provider](https://www.govt.nz/browse/consumer-rights-and-credit-record/how-to-complain/complain-about-your-financial-services-provider/)[Making a complaint about your financial service provider](https://www.consumerprotection.govt.nz/help-product-service/managing-money/how-to-complain-about-your-financial-service-provider)

## Let's check your actual deduction

I can help you assess whether the amount deducted seems consistent with your policy and the calculation.

You don't need to know all the answers yet. The insurer's name and the items they deducted money from are enough to get started.

## Gemini

Answer ID: c8b4d34c-f054-462a-857a-89b7ce31e821

To determine whether your insurer’s wear-and-tear (or depreciation) deduction is correct, you need to check the specific type of cover you purchased and what your policy wording says. In New Zealand, insurance payouts for stolen or damaged belongings generally fall into two categories:

* **Replacement Value ("New for Old"):** The insurer replaces the item with a brand-new equivalent, regardless of its age, without deducting for depreciation (though some items like clothing, footwear, or specific electronics may have strict exclusions or limits).
* **Indemnity Value ("Present-Day Value"):** The insurer pays what the item was worth immediately before it was stolen. This means taking the current replacement cost and subtracting an allowance for age, wear and tear, and use.

---

### Step-by-Step Guide to Check the Deduction

#### 1. Pull Out Your Policy Wording and Schedule
Find your policy schedule (which shows what level of cover you selected) and the full policy wording booklet. Look for sections detailing **Basis of Settlement**, **Contents Cover**, or **Indemnity vs. Replacement Value**.

#### 2. Check the Category of the Stolen Item
Insurers treat different types of items differently under standard New Zealand contents policies:
* **Usually Replaced "As New":** Major electronics, whiteware, and furniture are frequently covered on a replacement basis if they are under a certain age (e.g., lessV than 5 to 10 years old). 
* **Usually Subject to Depreciation:** Clothing, footwear, linen, sporting equipment, and items prone to rapid technological or physical wear and tear are often explicitly listed in policies as being settled on an **indemnity (present-day value)** basis from day one.

#### 3. Review How They Calculated the Deduction
Ask your insurer for a breakdown of how they arrived at the deduction amount. 
* Did they use a standard depreciation schedule (e.g., writing off a certain percentage per year)? 
* Check if the base price they started with matches the *current* retail cost to buy an equivalent item today, or if they incorrectly depreciated it off what you originally paid years ago.

#### 4. Challenge the Insurer (Internal Dispute Resolution)
If you believe the deduction is wrong—for example, your policy states you have "New for Old" cover for that item and it doesn't fall under an exclusion—contact your insurer's disputes or complaints team. Ask them to point specifically to the clause in your policy wording that allows for the wear-and-tear deduction on that item.

#### 5. Escalate to an Independent Dispute Resolution Scheme (IDRS)
If your insurer does not resolve the issue to your satisfaction through their internal process, you have the right to take the complaint to one of New Zealand's approved, free insurance dispute resolution schemes:
* **IFSO Scheme (Insurance & Financial Services Ombudsman)**
* **FSCL (Financial Services Complaints Limited)**

Both services are entirely free for consumers and can independently review whether your insurer applied the policy wording correctly.

---

Would you like help looking up what specific item was stolen and how standard New Zealand policies typically categorize its depreciation?

## AI Overviews

Answer ID: 40f2e188-41b5-4e9b-ad66-0b7c2e4b44be

To check whether your insurance company's deduction for wear and tear is right, you first need to **verify your policy type to see if they are allowed to deduct depreciation, and then audit their calculation against market value.**

In New Zealand, contents claims are usually settled in one of two ways, and insurers must adhere to strict rules depending on which one applies to you.

* * *

Step 1: Check Your Policy Type

Look at your **Policy Schedule** or wording to see how your stolen belongings are covered:

 * **Replacement Cover ("New for Old"):** If you have this cover, the insurer should pay the full cost to buy a new, equivalent item today. They **cannot** deduct money for wear and tear _unless_ the items fall under specific category exceptions listed in your policy (common exceptions include sporting equipment, clothing, or very old/obsolete electronics).

 * **Indemnity Cover ("Present Day Value"):** If your policy is indemnity-based—or if the stolen items fall into an indemnity exception—the insurer is legally allowed to factor in wear and tear. They must calculate what the item was worth _right before_ it was stolen, not what it costs brand new.

Step 2: Audit the Insurer's "Wear & Tear" Math

If the insurer is legally allowed to use indemnity value for your items, you must test their figures:

 1. **Ask for the Breakdown:** Request the insurer's written assessment showing how they calculated the depreciation rate for each item.

 2. **Check Second-Hand Market Value:** Indemnity value roughly equates to what the item would have sold for on the second-hand market. Check online marketplaces like Trade Me or Facebook Marketplace for the exact same model, age, and condition of your items. If a 3-year-old laptop like yours sells second-hand for $800, but the insurer only paid you $400 after their deduction, their calculation is wrong.

 3. **Challenge Excessive Lifespan Estimates:** Insurers often use automated depreciation tables (e.g., assuming a couch only lasts 5 years). If your item was in immaculate condition, you can argue for a lower deduction.

* * *

How to Fight the Deduction

If you find that the insurer made an unfair deduction or misapplied your policy, follow these steps to dispute it:

 * **Gather Evidence:** Collect old photos of the items showing their pre-theft condition, original receipts (if you have them), and screenshots of comparable second-hand items for sale.

 * **Lodge an Internal Complaint:** Contact your insurer and explicitly state that you wish to initiate their formal internal dispute resolution (IDR) process. Present your evidence and request a valuation review. By law in New Zealand, they must acknowledge your complaint within **5 business days**.

 * **Escalate to an Ombudsman:** If you reach a deadlock or the insurer doesn't resolve the issue within 2 months, you can escalate the case for free to an external dispute resolution scheme. Depending on who your insurer belongs to, this will be either the Insurance & Financial Services Ombudsman (IFSO) or Financial Services Complaints Ltd (FSCL). Their decisions are legally binding on the insurer.

To help you figure out if the deduction is fair, what **specific items** were stolen, **how old** were they, and does your policy schedule say **"Replacement" or "Indemnity"** cover?

## Google AI Mode

Answer ID: 4b9d9b2e-7769-4f1f-bac6-bb3fb0eb5575

**To check whether your insurer’s wear and tear deduction is correct, you need to compare their calculation against the specific terms in your policy document, specifically checking whether your belongings were covered under "replacement value" (new-for-old) or "indemnity value" (present-day value).**

Steps to Verify the Deduction

 1. **Review your policy wording and schedule:** Look up your policy document online or in your paperwork to see how claims for stolen items are calculated. Check if your policy specifies _new-for-old (replacement)_ or _indemnity (present-day/market value)_. [Insurance Council of New Zealand (ICNZ)+1]
 2. **Check policy limits and age exclusions:** Many contents policies apply new-for-old replacement only to items under a certain age (e.g., electronics or clothing older than 2 or 5 years might switch automatically to indemnity value, allowing a depreciation deduction). [Insurance Council of New Zealand (ICNZ)]
 3. **Ask the insurer for their breakdown:** Request a clear, written explanation of how they calculated the depreciation or wear and tear. Ask for the original estimated lifespan of the item, its age, and the exact formula or depreciation rate they applied.
 4. **Compare with market second-hand value:** If it is an indemnity value settlement, the deduction should reflect the actual fair market or second-hand value of the item immediately before it was stolen. Check online marketplaces (like Trade Me) for similar items of the same age and condition to see if the insurer's valuation is realistic. [Insurance Council of New Zealand (ICNZ)]
 5. **Escalate through internal dispute resolution:** If you disagree with the math or believe they misapplied the policy terms, contact your insurer's internal dispute resolution service or complaints department.
 6. **Contact FSCL or GSL:** If the dispute cannot be resolved with your insurer directly, you can take the matter to an independent dispute resolution scheme that New Zealand insurers belong to, such as the [Financial Services Complaints Limited (FSCL)](https://www.fscl.org.nz) or the Insurance & Financial Services Ombudsman (IFSO).

If you can share the **type of item** (e.g., clothing, electronics, furniture), its **approximate age** , and whether your policy is **new-for-old or indemnity** , I can help you better understand what a fair valuation looks like.