Insurers are urging people not to rely on the latest Auckland Council valuations when it comes to working out how much to insure their home for.
Last month the council revealed valuation figures for the city's 548,000 properties.
Three years on from the last valuation round, the average capital value has surged by 45 per cent to $1.076m.
The valuations are made up of two parts - the land value and the improvements value, which typically refers to the house and anything built on the site.
But Amelia Macandrew, customer relations manager at AA Insurance, said the improvement value should not be relied on for deciding how much to insure a home for.
"This is an average value and doesn't represent the actual cost of replacing your home, so you shouldn't rely on it when deciding how much insurance you need."
Macandrew said home insurance was designed to cover the cost of rebuilding your specific home if it was damaged.
"When deciding the rebuild, or sum insured, value for your home, consider all the things you would want reinstated - things that make your home special.
"You should include any special materials and chattels like carpets, blinds, lighting, fittings and fixtures. You should also include improvements you've made like to your kitchen, bathroom, landscaping, or decking.
"These are what matter for insurance purposes, not your CV."
Richard Godman, manager technical underwriting, personal insurance at Vero, said rateable values did not affect insurance premiums because they were an estimate of the market value of the house and land together.
"Insurance premiums only reflect the amount of insurance you have in place to rebuild your house (your 'sum insured')."
Godman said the cost to rebuild a home would be similar no matter which part of the country a house was in but the value of the land meant the sale price could be vastly different.
"In some regions, like Auckland, council valuations will be significantly higher than the rebuild cost for a home, and using the rateable valuation for your sum insured could mean you are paying for much more cover than you will ever need.
"But in other regions, the rateable value of your property might actually be lower than the cost to rebuild it."
Godman said using the rateable value as the sum insured amount might mean people did not have enough cover to rebuild a house if it was extensively damaged.
"Even relying on the 'improvement value' portion of a council valuation alone is not recommended.
"It's often quite a rough estimate, and due to rising building costs, in many cases it wouldn't be enough to replace your home if anything was to happen to it."
Brendan McGillicuddy, national manager home portfolio at IAG, the parent company of State Insurance, NZI and Lumley, said it had received some calls from customers asking whether there would be any impact on their policies after the revaluations.
"Homeowners should be aware council valuations do not reflect the cost of rebuilding homes as factors such the cost of building materials and labour change each year."
McGillicuddy said there were examples of homeowners who had insured their home based on market value or council valuation.
"Sadly, they may then find themselves underinsured if the home is destroyed by fire, flood or earthquake.
"We cannot stress enough the importance of checking your insurance policy and the information insurers provide. Most insurer websites have plenty of good information - if in doubt talk to your insurer."
Insurers provide free online calculators to help people work out how much to insure their house for although people who want a more accurate assessment are urged to use a builder, architect, quantity surveyor or other building expert.