Rapidly rising building costs are leaving 85 per cent of New Zealand homeowners underinsured, an industry expert says.

Jo Mason, chief executive of insurance firm NZ Brokers, says rising costs and changes to policy wording mean homeowners are uninsured by an average of 28 per cent.

"In the past six months we have had several devastating flood, fire, seismic and adverse weather incidents around the country," Mason said.

"It is crucial that homeowners are aware of what it would cost to rebuild their house from scratch and review this regularly," she said.

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Mason said that with building prices rising across the country by up to 17 per cent, it's urgent for homeowners to check they are fully insured for their property, not just a portion of it.

"My advice to homeowners is don't take unnecessary risks, consult with an insurance broker in your area who can assess your needs and is able to advise what type of cover is best suited."

Mason also said changes to sum insured insurance properties could affect homeowners.

"Sum insured policies limit the maximum amount your insurer will pay in the event your home is totally destroyed," Mason said.

"In an environment where building costs are rising at around 7-17 per cent each year, there is no guarantee that the amount you are insured for will be enough to cover the cost of a total rebuild."

"What this means is that a house which cost $500,000 to construct just two years ago could be up to $185,000 more to rebuild today. Effectively the risk of the rebuild cost being greater than the insured value is borne entirely by the policyholder," she said.