ChatGPT · New Zealand
If we raise our home excess, what losses would we need to pay ourselves?
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
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
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.
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Captured 11 October 2026