Insurance: finding the right fit

Should you reconsider your insurance cover when you make changes in your life? Hamish Barwick looks at the options.

It would be fair to say the past two years have involved a lot of change due to the impact of the global pandemic. Many New Zealanders switched jobs, launched or closed down businesses or restructured their lifestyles in quite substantial ways. Without the ability to travel internationally, many invested in home upgrades or renovations. Couples reconsidered their timelines and elected to start or extend their families.

While insurance might not be top of mind when making big life decisions, significant changes may impact your cover. It’s a good idea at some point to actively reconsider and possibly reset your safety nets.

If you’ve recently become a parent you may want to consider taking life insurance so that in the event of your death your dependants would be looked after. If you are the main breadwinner, income protection insurance is another one to consider if being unable to work due to illness would impact your ability to pay your rent or mortgage. This insurance provides a percentage of your income while you recover, keeping in mind that ACC only covers loss of income if you have an accident at work. Other options are trauma and disability insurances which provide lump sums to those diagnosed with a serious illness, such as cancer.

Those embarking on home renovations also have some insurance cover considerations to ponder. Did you know that specific insurance is available – and important – to cover damage to a property while it’s being worked on? As well as accidental damage, it covers the impact of theft and weather events. If renovations including knocking down walls, additional insurance cover is required specifically for that. 

Contents insurance is another area that deserves reconsideration, especially if you’ve been spending up on treats and treasures. At the other end of the scale, there are basic contents policies available that only cover specific events, rather than all risks.

Perhaps one of those treats was new wheels. If you’ve spent your overseas travel fund on a new car, what insurance cover should you go for? Comprehensive car insurance could mean you’re fully covered – whether you’re in an accident, your car gets stolen, or your pride and joy is damaged in a storm or a fire. Comprehensive insurance will also cover you for damage you might cause to other cars or property.

However, there are cheaper options. Third party insurance covers for damage to another person’s vehicle or property, but not yours. Extending third party insurance to fire and theft covers the risk of the car being destroyed by fire or stolen.

Another trend over the last couple of years, made easier as more people work from home, has been for families to take on a pet. If there is a new cat or dog in your life, consider insurance to cover unexpected vet bills. As well as accidents, dogs and cats can suffer from the same illnesses as humans, like cancer, and also have their own health risks. Dogs can get sick from eating chocolate and cats can have allergic reactions to insect bites; check policies cover such things when you’re shopping around for pet insurance. 

Overseas travel – when it’s back on the agenda – may feel riskier than it once did. Travel insurance covering loss or theft of belongings, extra costs if flights are cancelled and medical treatment if you have an accident or become ill is more critical than ever before. Consumer channel sorted.org.nz advises taking out insurance if you are travelling domestically, too. This means you are covered if flights are delayed or if there are costs that won’t be covered by ACC or your home contents insurer.

There are plenty of options available if you are considering changing your insurance cover – and it makes sense to do so when you make significant changes in your life.