By the numbers: Insurance premium rises slow from dreadful to just a bit more than inflation

Wednesday, 12 February 2025

It’s been heavy weather for households, however, the speed at which insurance premiums for house, car and contents cover has slowed.

BY THE NUMBERS: Wellingtonians have been whacked by the highest premium rises for house insurance.

Cantabrians have seen their contents insurance premiums rise more than dwellers in other cities.

Aucklanders have faced the fastest rises in car insurance premiums.

Last year was a tough time for people renewing their insurance says Julian Lim, chief executive of the Quashed insurance comparison and sales platform.

But there is a glimmer of good news, with the rate of increases in the premiums quoted by house, contents and car insurers through Quashed having slowed.

In the 12 months to the end of 2023, Quashed saw the average premiums quoted for a package of house, contents and car cover rise by 29.7%, a painful increase of $1077.

Family's insurance premium drop after showing property not in flood area

In the 12 months to the end of 2024, the rise was a much lower 3.1%, equating to an increase of $147, a point echoing insurer Tower, which announced on Tuesday it had made large profits, but that increases in premiums had slowed.

Last year ended with inflation as measured by the Consumer Price Index (CPI) at 2.2%.

7%

Lim says the average car insurance quote given by insurers to people seeking quotes through Quashed in the last three months of last year was $1325, up by 7% on the same period in the previous year.

2%

The average house insurance quote was up 2% at $2704.

1%

And the average contents insurance policy was up 1% at $823.

$1600

Justin Lim, founder of the Quashed insurance comparison website.

But where you live matters. The average Auckland car insurance quote was $1600 in Auckland, the result of the city’s higher crash and crime rates.

$393

In Wellington the average house insurance quote was $4446, an increase of $393 on the quotes they were being given a year earlier.

$6652

The cost of house insurance in the capital meant that Wellingtonians faced the highest quotes for a package of house, car and contents, Lim said.

In the last quarter of 2024, the combined average quote was $6652.

330%

Owners of flood-prone homes have found themselves being quoted higher premiums by insurers.

The rise in premiums quoted by insurers have not fallen evenly, with insurers deepening their risk-based pricing, charging more to people trying to insure assets that are more likely to be involved in insurance claims, and more costly insurance claims, such as flood-prone homes, or cars most often targeted by thieves.

Lim said there had been a 330% increase in people seeking quotes in the last year through Quashed.

$830

The difference in quotes for insurance on the same asset can vary widely between insurers. Lim gave the example of someone seeking comprehensive cover for a 2020 Toyota Corolla in Auckland. Quotes from the cheapest and most expensive insurers differed by $830.

30%

As well as shopping around, many people were downgrading their policies by opting for higher excesses in a bid to keep premiums down.

“Reducing your sum insured to reflect current value (as appropriate) and increasing excess to a higher amount you can afford will lower your premiums,” Lim said.

He gave the example of adjusting the sum insured for the Toyota Corolla from $24,000 to $22,000 and increasing the excess from $500 to $1500. That reduced premiums by 30%.