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Buying your first home is a big financial milestone, and as a young professional in New Zealand, the key is to protect yourself against risks that could force you to sell the house, drain your savings, or make it difficult to keep up with mortgage payments.

My recommendation is to think about insurance in terms of what could cause a major financial setback, rather than buying every policy available. Your income is likely to be one of your most valuable assets, and your home will probably be one of your largest financial commitments.

The six financial risks to prepare for

1. Damage to your home or land

Top priority

Insurance: House insurance

A fire, earthquake, storm, flood or other major event could leave you with a damaged home and a mortgage still to repay.

• Insure the full estimated cost of rebuilding, not just the market value or purchase price.
• Check cover for natural hazards, temporary accommodation, demolition and debris removal.
• Understand exclusions and excesses, especially for flooding, landslips, retaining walls and land damage.

In New Zealand, eligible homes with private fire insurance generally receive some natural-hazard cover through the Natural Hazards Commission Toka Tū Ake (NHC). This is not comprehensive cover for all damage to land or buildings. About natural hazards cover :: Natural Hazards Commission Toka Tū AkeBefore you make an offer on a house :: Natural Hazards Commission Toka Tū Ake

2. Losing your income through illness or injury

Top priority

Insurance: Income protection or mortgage repayment cover

If you cannot work for several months, your mortgage, rates, utilities and food costs continue even when your salary stops.

• Income protection can replace part of your income if you meet the policy's disability criteria.
• Mortgage repayment cover may pay a specified amount towards your repayments under defined circumstances.
• Check the waiting period before payments begin, how long benefits last, and whether your occupation is covered.

If your budget only has room for a small emergency fund after buying the home, this risk deserves particular attention. Compare policies carefully: redundancy and unemployment are not automatically covered.

3. Dying and leaving a mortgage behind

Insurance: Life insurance

Life insurance can provide a lump sum to help repay the mortgage if you die.

It is particularly important if you have a partner, children, a co-borrower or anyone else who would struggle with the repayments without your income.

If you're single with no dependants, you may need less life cover than someone supporting a family. Consider whether anyone else would be responsible for the debt and what would happen to the property.

4. Losing your belongings or facing a liability claim

Insurance: Contents insurance

Theft, fire, water damage or another insured event could mean replacing your furniture, clothing, electronics and appliances at once.

• Estimate what it would cost to replace everything you own at today's prices.
• Check limits for jewellery, bicycles, computers and other valuable items.
• Look at personal liability cover, which may help with certain claims if you accidentally injure someone or damage their property.

Contents insurance is separate from insurance on the building itself. House and contents insurance

5. Unexpected costs from a townhouse, unit or apartment

Insurance: Appropriate building and contents cover, plus a financial buffer

If you're buying a unit or apartment, check whether the body corporate insures the building and what costs owners must contribute towards.

A major repair, insurance excess, earthquake-strengthening project or special levy can create a substantial bill even if you have your own contents insurance.

Before committing, review the body corporate's insurance policy, meeting minutes, maintenance plans, financial statements and any known or proposed special levies. For shared buildings, also investigate earthquake-prone status and potential strengthening costs. Before you make an offer on a house :: Natural Hazards Commission Toka Tū Ake

6. Being unable to cover excesses and other unexpected expenses

Protection: Emergency savings, with insurance for major losses

Insurance doesn't cover every expense. You may face a policy excess, an excluded repair, a temporary loss of rental income, an urgent repair or a period without work.

Keep a separate cash reserve rather than putting every dollar into your deposit. Build towards three to six months of essential expenses, including mortgage repayments, if you can. If that is not realistic immediately after settlement, start with a smaller accessible buffer and grow it over time.

This is especially important because insurance is designed to transfer specified risks, not eliminate every financial shock.

What I'd prioritise before buying

For a first-home buyer, I would approach the decisions in this order:

Priority	Action
1	Get suitable house insurance confirmed before settlement, including the required fire cover.
2	Check income protection options and calculate how long you could afford the mortgage without your salary.
3	Keep enough cash for insurance excesses, urgent repairs and ordinary living costs.
4	Get contents insurance that reflects the value of your possessions.
5	Consider life insurance based on who depends on you financially.
6	If buying a unit or townhouse, investigate body corporate insurance and potential extra costs.

Other policies worth considering

Depending on your circumstances, you might also compare:

• Trauma or critical illness cover: A lump sum following a qualifying serious illness or medical event. Check definitions and exclusions carefully.
• Total and permanent disability cover: May provide a lump sum if you meet the policy's criteria for permanent disability.
• Landlord insurance: Relevant if you plan to rent out the property rather than live in it.

You don't necessarily need all of these. Your existing employer benefits, savings, dependants and ability to rely on another household income should influence your choices. A licensed insurance adviser can help compare policy terms and costs; the Financial Markets Authority explains what insurance advisers do. Insurance advice

Make the plan fit your budget

I would focus on insuring against losses you couldn't comfortably absorb yourself, while using savings to handle smaller, manageable costs.

To narrow this down to the most relevant risks for your first home, will you be buying a standalone house, a townhouse, or an apartment? That makes a significant difference to the building insurance and shared-property risks you need to prepare for.