Understanding Common Insurance Claims
Insurance claims data reveals fascinating patterns about the risks NZ homeowners actually face. Understanding the most common claims helps you identify vulnerabilities in your own home and ensure your buildings insurance covers these scenarios. Let's examine the top five claims and what you can do to minimise your risk.
1. Storm and Weather Damage (Most Common)
Storm damage is by far the most frequent buildings insurance claim in New Zealand. Our volatile weather patterns bring strong winds, heavy rain, hail, and flooding that can cause substantial property damage.
Common Storm Damage Claims
- Roof damage from high winds or hail
- Water ingress from heavy rain
- Broken windows and doors
- Damage to gutters and downpipes
- Tree damage affecting the structure
- Flooding from excessive rainfall
How to Reduce Storm Risk
- Maintain your roof in good condition; check after winter
- Clear gutters and downpipes regularly
- Trim tree branches that overhang your home
- Install storm shutters or impact-resistant windows if in high-wind areas
- Ensure adequate drainage around your property
- Secure outdoor items that could become projectiles in wind
Insurance Considerations
Most buildings insurance covers storm damage as standard. However, some policies may have limits on wind damage or require maintenance evidence. When making a claim, document damage with photos and get repair quotes. Having a maintained roof and gutters helps your claim succeed.
2. Water Damage and Flooding
Water damage is the second most common claim type, ranging from internal burst pipes to external flooding. New Zealand's changing weather patterns, particularly in flood-prone areas, have increased the frequency of water damage claims.
Types of Water Damage Claims
- Burst or frozen pipes
- Leaking roofs or skylights
- Flooding from heavy rain or overflowing streams
- Failed guttering or drainage
- Damage from blocked downpipes
What's Usually Covered
Most policies cover accidental water damage like burst pipes. However, damage from lack of maintenance (e.g., neglected gutters causing water ingress) may not be covered. Gradual water damage is typically excluded.
Prevention Strategies
- Maintain gutters and downpipes throughout the year
- Insulate pipes in cold areas to prevent freezing
- Install a sump pump if you're in a flood-prone area
- Grade your property so water drains away from the foundation
- Have your roof inspected regularly
- Know where your water shut-off valve is located
Flood Insurance Considerations
If you live in a flood-prone area, ensure your policy covers flood damage. Some insurers may exclude or limit flood cover in high-risk zones. Declare flood risk to your insurer – non-disclosure could invalidate your claim.
3. Fire Damage
While less common than storm damage, fire claims are typically the most expensive. A house fire can result in total loss or require extensive repairs and rebuilding.
Common Fire Claims Scenarios
- Accidental fires from cooking or electrical faults
- Fireplace and chimney fires
- Wildfire damage
- Fire from external sources affecting your property
Fire Insurance Coverage
Most buildings policies cover fire damage as standard. This typically includes not just the structural damage but also smoke damage, water damage from firefighting, and loss of use while rebuilding (in some policies).
Risk Reduction
- Install working smoke alarms on each level
- Have electrical systems inspected regularly
- Clean chimneys annually if you have fireplaces
- Keep flammable materials away from heat sources
- Ensure gas appliances are serviced regularly
- Create a defensible space around your home if in wildfire-prone areas
Building Insurance and Fire Protection
Having functional fire safety equipment (alarms, extinguishers) may reduce your insurance premium. When claiming for fire damage, your adherence to maintenance standards will affect the claim outcome.
4. Theft and Vandalism
Break-ins, burglary, and vandalism represent a significant portion of buildings insurance claims. While contents theft is covered by contents insurance, damage to the building structure from break-ins and vandalism is a buildings insurance matter.
Common Theft and Vandalism Claims
- Broken windows and doors from break-ins
- Damage to fences and gates
- Graffiti and paint damage
- Damage to fixtures during theft
What's Typically Covered
Buildings insurance covers damage to the building structure from theft or vandalism. This includes replacing doors, windows, and repairing vandalism damage. However, contents stolen during the break-in would be claimed under contents insurance, not buildings insurance.
Prevention Measures
- Install good locks on doors and windows
- Consider security alarms and cameras
- Maintain good visibility around your property
- Ensure your home looks occupied when you're away
- Join a neighbourhood watch scheme
- Report suspicious activity to police
Insurance Discount Opportunities
Installing approved security systems may qualify you for insurance discounts. Let your insurer know about security measures you've implemented.
5. Earthquake and Natural Disaster Damage
While not as frequent as storm damage, earthquake and natural disaster claims can be catastrophic. The 2011 Christchurch earthquakes and other seismic events have caused billions in damage.
Earthquake Insurance in New Zealand
Earthquake damage is covered by the Earthquake Commission (EQC/Toka Tu Ake), which provides automatic cover up to $300,000 plus GST. Your buildings insurer covers damage above this limit. Ensure your sum insured is adequate for potential earthquake scenarios in your region.
Other Natural Disasters
Volcanic eruptions, landslides, and subsidence may or may not be covered depending on your policy. Some insurers offer "natural disaster" or "natural perils" cover that encompasses multiple types of events.
Understanding Your Coverage
Review your policy to understand exactly what's covered regarding earthquakes and other natural disasters. The combination of residential building insurance and EQC should provide comprehensive natural disaster protection.
What's NOT Usually Covered
Understanding exclusions is as important as understanding what's covered:
- Gradual damage or wear and tear
- Damage from lack of maintenance
- Damage caused by poor workmanship in repairs
- Cosmetic damage unless structural integrity is affected
- Damage caused by your negligence
- Contents (requires separate contents insurance)
Making a Claim Successfully
Act Quickly
Report damage to your insurer as soon as possible. Most policies require prompt notification.
Document Everything
Take photos of all damage from multiple angles. Keep receipts for emergency repairs and temporary measures.
Get Professional Quotes
Obtain detailed repair estimates from qualified tradespeople. Your insurer may require multiple quotes.
Keep Records
Maintain records of your maintenance and any improvements you've made to your home. This supports your claim.
Understand Your Excess
Remember that your excess applies to each claim. This is the amount you must pay towards repairs.
Conclusion
Understanding the most common claims helps you identify risks in your home and protect yourself appropriately. Storm damage, water damage, and fire are the top three claim types in New Zealand. By maintaining your property, having appropriate buildings insurance coverage, and taking preventive measures, you can minimise both the likelihood and impact of claims. Regular reviews of your policy ensure your cover remains adequate for your changing circumstances.
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James Thornton
Insurance expert with extensive knowledge of New Zealand property protection and buildings insurance coverage.
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