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When choosing contents insurance in New Zealand, one of the biggest differences between policies is whether the insurer pays you cash or replaces your belongings, and how much you’ll actually receive after a claim.

A policy with a lower premium can end up costing more if it pays depreciated values, has restrictive replacement conditions, or applies limits to particular items.

1. Check how claims are paid

What to check	Why it matters
Replacement value vs market value	Replacement cover generally aims to provide a new equivalent item, while market or indemnity value may account for age, wear and tear, and depreciation.
Cash settlement rules	Find out whether you can choose cash instead of a replacement, and how the cash amount is calculated.
Depreciation	Check whether the insurer deducts depreciation for older furniture, clothing, appliances, electronics and other belongings.
Equivalent replacements	Ask whether the insurer will replace an item with the same model, a comparable model, or the cheapest suitable alternative.
Repair, replace or cash discretion	Check who makes the decision and whether you can challenge it if the proposed replacement isn't suitable.

Important: A policy advertising “new-for-old” cover does not necessarily mean you'll receive the full retail price in cash. The insurer may only offer that amount if you actually replace the item, or may settle differently depending on the policy wording.

2. Check the fine print on cash payouts

This is particularly important if you prefer to shop for replacements yourself or don't want store vouchers.

• Can you choose cash? Or can the insurer insist on arranging repairs, supplying a replacement, or providing a voucher or store credit?
• How is cash calculated? Is it the full cost of a new equivalent item, the insurer's supplier price, or the item's depreciated present value?
• Do you have to replace the item? Ask whether the insurer initially pays a lower amount and releases the balance only after you provide receipts for a replacement.
• Can you buy from any retailer? Check whether the payout is based on a particular supplier's pricing and whether you can choose your own retailer.
• What happens if an item is unavailable in New Zealand? Ask how discontinued, imported or specialist items are valued.
• Can you keep the damaged item? Check whether any salvage value is deducted from a cash settlement.

These aren't just theoretical differences: NZ insurers' published policy documents describe different settlement options, including cash, repairs, replacements and vouchers. Contents Insurance PolicyWe choose how we settle contents claimsICNZ Consumer Guide

3. Check which belongings qualify for new-for-old replacement

Don't assume every item is covered on the same basis. Some policies mix replacement cover with present-value cover, depending on the item and its age. House & Contents Insurance: Sum Insured ExplainedICNZ Consumer Guide

Pay particular attention to:

• Electronics: laptops, phones, TVs, cameras and gaming equipment.
• Furniture and appliances: beds, sofas, fridges, washing machines and other household essentials.
• Clothing and footwear: these may be treated differently from other contents.
• Jewellery, watches and artwork: check both replacement terms and individual item limits.
• Collectables and antiques: a modern equivalent may not be an appropriate substitute for a rare or valuable item.
• Pairs and sets: ask whether a claim for one damaged item covers the loss of value to the remaining pair or set.

For expensive belongings, ask whether you need to specify the item individually on your policy and provide a valuation, receipt or photographs.

4. Check the limits that could reduce your payout

Policy feature	What to verify
Total contents sum insured	Would it cover replacing everything you own at today's prices?
Item sub-limits	Are there lower limits for jewellery, cash, bicycles, collections or other valuables?
Excess	How much would you pay yourself for each claim, and are special excesses applicable?
Accidental damage	Is it included, or is cover limited to specified events such as fire and theft?
Contents away from home	Are belongings covered outside the home, while travelling, or in a vehicle?
Natural disasters	What applies to your belongings following an earthquake, flood or other natural disaster?

Industry guidance from the Insurance Council of New Zealand explains that replacement cover can have age restrictions and that cash settlements may revert to indemnity value in some circumstances. House & Contents Insurance: Sum Insured ExplainedICNZ Consumer Guide

5. Questions to ask each insurer before buying

You can use these questions when requesting a quote or comparing policy documents.

Insurance comparison checklist

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Can I choose a cash settlement instead of a replacement?

If I choose cash, will you pay replacement cost or depreciated present value?

Do I have to replace the item and provide receipts to receive the full amount?

Can I choose my own retailer, or will you use an approved supplier?

Which items are excluded from new-for-old cover, and are there age limits?

What are the limits for jewellery, electronics and other high-value belongings?

What excesses and special claim conditions apply?

Can you show me an example claim settlement for an older laptop and a sofa?

Copy questionsReset checklist

My recommendation

For a New Zealand contents policy, I'd prioritise clear cash-settlement terms, broad new-for-old replacement cover, reasonable item limits and an affordable excess over choosing solely on the annual premium.

Read the policy wording alongside the policy summary, because the detailed wording determines how claims are settled. Consumer NZ's contents insurance buying guide is a useful starting point, and the Insurance Council of New Zealand's consumer guides explain replacement versus indemnity cover.

The key question to get answered in writing is: “If my belongings are destroyed and I want the money rather than replacements, exactly how much will you pay, and what conditions must I meet to receive it?”