Insurance costs down, but there's a widening gap between premiums

Author: Michael Sergel,
Publish Date: Tue, 25 Aug 2026, 5:00am

Many households may have finally seen their insurance premiums get cheaper but the gap between the cheapest and most expensive premiums may also be getting wider.

Stats NZ data shows average home insurance premiums between April and June this year were down 0.8% on the same period last year, average contents insurance premiums were down 4% and average vehicle insurance premiums were up just 0.6%.

Even when including life and health insurance, average total insurance prices have increased just 1.2% – well below the 2% rise in wages and 4.1% rise in overall consumer prices.

Justin Lim, the chief executive of insurance comparison website Quashed, said changes to how insurers assessed risk were starting to have some effect.

“Insurers are adjusting their pricing more actively with whole risk-based pricing, where they’re more actively reflecting the risk in the pricing.”

Tower Insurance announced a change of approach last year that saw 90% of customers paying less (an average decrease of $70 a year) and 10% of customers pay more (a median increase of $230 a year).

While Consumer NZ has credited Tower with giving customers breakdowns of how risks affected their premiums, it has criticised other insurers for not being transparent about the data underpinning their pricing.

The Insurance Council said at the time that premiums were based on a range of risk factors, and it cost more to protect some properties “on flood plains or near major rivers” or “in regions with higher seismic activity”.

Quashed data showed average home and contents insurance quotes have fallen in the past year, particularly in Wellington and Canterbury.

However, Lim said there was also more variation in what different insurers were quoting for the same property.

The average gap between the highest and lowest quotes for the same property or vehicle had increased to $1401 for house insurance, $599 for contents insurance and $651 for car insurance.

“Our key takeaway would be for consumers to shop your policies a lot more. A lot of consumers could potentially be paying a lot more than they have to when they’re rolling over their policies without shopping around.”

Despite the recent fall in some premiums, the average household is still spending more of their income on insurance than they were five years ago, due in part to a historic spike in premiums after the 2023 severe weather events.

Average home insurance premiums have increased 58.5% over that period, average contents premiums have increased 52.6%, and average vehicle insurance has risen 39.6%.

Total insurance prices have increased by more than a third (33.9%) in the past five years, almost twice as fast as incomes (17.3%) and faster than overall consumer prices (25.6%).

Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for more than a decade.