# S-P03-H-02: If we raise our home excess, what losses would we need to pay ourselves? Collected 11 October 2026 [Home and contents insurance study](https://nzbrands.ai/research/insurance/home-contents-insurance) ## ChatGPT Answer ID: 2fe4291c-25d1-41ae-a8bd-da762c1f1eb4 In New Zealand, **raising your home insurance excess means you agree to pay more towards the cost of a claim before your insurer pays its share.** In return, your insurer will generally reduce your premium. The key difference is that you would need to cover more of the cost yourself whenever you make a claim that is subject to your excess. This can affect claims for damage to your house, and potentially other insured losses, depending on your policy. ## What would you have to pay yourself? Here are some common examples. - **Storm damage:** If a storm damages your roof, you would pay the excess that applies to the claim. - **Water damage:** If a burst pipe damages your walls, flooring or carpets, you would pay the applicable excess. - **Fire damage:** If a fire damages your home, you would pay your excess towards the covered loss. - **Accidental damage:** If you accidentally damage something covered by your home policy, your excess would generally apply. - **Earthquake damage:** In New Zealand, earthquake claims can involve a separate excess and specific arrangements with the Natural Hazards Commission Toka Tū Ake (formerly EQC). The amount you pay depends on the circumstances and your insurance policy. Your excess generally applies to a claim, rather than to every damaged item within that claim. However, separate events or different types of damage can sometimes attract separate excesses. ## How much more could you have to pay? For example, suppose you increase your home excess from $500 to $2,000. | Repair cost | With a $500 excess | With a $2,000 excess | |---|---:|---:| | $800 | You pay $500 | You pay $800 | | $3,000 | You pay $500 | You pay $2,000 | | $10,000 | You pay $500 | You pay $2,000 | | $50,000 | You pay $500 | You pay $2,000 | These examples assume the damage is covered by your policy and that the stated excess is the only one that applies. If the repair costs less than your excess, you would generally pay for the repair yourself rather than receive an insurance payout. A higher excess can therefore make smaller claims impractical. [Consumer NZ](https://www.consumer.org.nz/money/insurance/house-and-contents-insurance/guide) ## What about earthquakes and natural disasters in New Zealand? This is worth checking carefully. New Zealand's Natural Hazards Commission Toka Tū Ake provides first-layer cover for eligible homes and residential land when a home insurance policy includes fire cover. Private insurers generally provide additional cover under the terms of your policy. For natural hazard damage occurring on or after 1 July 2024, the standard Natural Hazards Commission excess is generally: - **Building damage:** $500 per insured home. - **Land damage:** $500 per insured home. These are separate from any additional excess that may apply under your private insurance policy. Your insurer can explain how your chosen excess affects a particular natural hazard claim. [Natural Hazards Commission](https://www.naturalhazards.govt.nz/insurance-and-claims/about-nhcover/) ## Is raising your excess worth it? It comes down to how much you save on premiums compared with how much additional risk you take on. For example, if raising your excess from $500 to $2,000 saves you $300 a year: - You save $1,500 over five years if you make no claims and the saving remains constant. - You would need to pay an additional $1,500 towards a claim compared with your current excess. - One claim could wipe out five years of premium savings. I'd suggest making sure you could comfortably afford the higher excess out of your savings, particularly if you had to pay it unexpectedly. ## Let's look at your situation **Which insurance company are you with, and what excess are you considering changing from and to?** For example, you might be moving from $500 to $1,000, or from $1,000 to $2,500. With those details, I can help you understand which types of claims might cost you more and what policy-specific details you should check before deciding. ## Gemini Answer ID: 9a79c6f8-f4e7-45a7-9d5d-8eba33e63a86 If you raise your home insurance excess (the amount you agree to pay out of pocket before your insurer covers a claim), **you are choosing to pay for any loss or damage up to that new excess amount yourself.** In New Zealand home insurance, the excess applies on a **per-claim basis**. Here is a breakdown of what that means for your out-of-pocket costs: ### 1. Losses You Will Need to Pay Entirely Yourself Any claim where the total cost of repair or replacement is **less than or equal to your new excess** will be entirely your responsibility. For example: * **Minor storm damage:** A few broken roof tiles or a damaged fence where repairs cost $800, and your excess is raised from $500 to $1,000. (You pay the full $800; the insurer pays nothing). * **Accidental breakages:** Minor accidental damage to fixtures or glass that falls below your new deductible limit. ### 2. The First Portion of Larger Losses For any claim where the damage **exceeds** your excess, you must still pay the first portion (the excess amount), and the insurer covers the remaining balance above that. * For example, if a plumbing leak causes $5,000 worth of damage to your flooring and your excess is $1,000, you pay the first **$1,000**, and your insurer pays the remaining **$4,000**. If you had raised that excess to $2,500, you would have to pay $2,500 out of pocket for the exact same claim. --- ### Key Things to Keep in Mind in New Zealand * **Different Excess Types:** Be aware that New Zealand insurers often apply different types of excesses to a single policy. A higher standard excess applies to general claims, but you may also have separate, specific excesses for things like **earthquake/natural disaster claims** (often calculated as a percentage of the sum insured) or **flood/landslip claims**. * **The Trade-off:** Raising your excess lowers your annual or monthly premium, but it increases your financial risk if an unexpected event happens. Make sure you have an emergency fund set aside that can comfortably cover the higher out-of-pocket amount if you need to make a claim. ## AI Overviews Answer ID: bc2aefbb-da8c-400a-87f5-0224e6152b4f If you raise your home insurance excess, you will need to pay for **any loss or damage that falls below your new excess amount** , as well as **the increased portion of the excess** for larger claims. What You Would Pay For * **Minor or Small-Scale Damages:** If your new excess is $1,000 and a windstorm damages a fence section costing $700 to fix, you must pay the entire $700 yourself. You cannot claim this from your insurer. * **The "First Dollar" of Larger Claims:** If a major pipe burst causes $5,000 worth of damage, you will have to pay the first $1,000 (your excess), and your insurer will cover the remaining $4,000. * **Standard Excluded Events:** Raising your excess does not change your policy coverage. You still pay 100% of the costs for standard exclusions like gradual wear and tear, rot, or insect damage. Common Special Excesses to Keep in Mind In New Zealand, raising your standard excess might not change the excess you have to pay for specific types of losses. You will still be responsible for: * **Natural Disaster Excess:** For earthquake or tsunami damage, your standard excess usually does not apply. Instead, a specific **EQC (Toka Tū Ake) or private natural disaster excess** applies, which is often calculated as a percentage of the loss (e.g., 1% of the sum insured) or a higher fixed amount. * **Specialist Claims:** Many NZ insurers retain separate, fixed excesses for specific events—such as hidden water pipe leaks or landlord-specific damages—regardless of how high you raise your standard policy excess. To help you calculate if this shift makes sense for your budget, could you tell me: * What is your **current excess** and what **new excess** level are you considering? * Who is your **insurance provider**? * What is the **premium saving** they are offering you for making the switch? ## Google AI Mode Answer ID: 4f3526a6-401e-4b99-a9fc-155621b57a4e Raising your home excess (also known as a deductible) means you are agreeing to pay a higher portion of any claim out of your own pocket before your insurance kicks in. Here is what you will need to pay yourself when you raise your excess: * * **The Increased Excess Amount:** For any accepted claim, you will have to pay the new, higher dollar amount you selected. For example, if you raise your excess from $ 400 to $ 1 , 000 , you must pay the first $ 1 , 000 of the loss or repair cost, and the insurer pays the remaining balance above that. * **Losses Below Your New Excess:** If the total cost to repair or replace the damaged property is _less_ than your new excess amount, you will have to pay for **100% of the loss yourself**. The insurer will not contribute anything, and it generally won't be worth lodging a claim. * **Specific or Optional Excesses:** Depending on your policy, you might have multiple types of excesses that stack or apply independently (such as a standard excess, an earthquake/natural disaster excess, or a high-value item excess). Raising your standard excess means you cover more of the primary claim, but you should check if your insurer applies separate rules for events like natural disasters or specific types of accidental damage regulated by the 111 Emergency or the [Natural Hazards Commission Toka Tū Ake](https://www.naturalhazards.govt.nz/). * Would you like me to help you weigh the **pros and cons of a higher excess** , or do you want to calculate how much you could save on your **annual premium** by making the switch?