Overpriced premiums and unexpectedly rejected claims are two issues the Consumer Affairs Minister is tackling during a review of New Zealand's insurance laws.
Kris Faafoi says an overhaul of our current laws, which are fragmented and in some cases more than 100 years old, was long overdue.
People were not always aware of details in the fine print which caught them out when they went to make a claim and it was this frustration which had put the issue on the Government's radar.
"There's frustration among consumers, that they dutifully pay their insurance premiums on a regular basis and every so often when you're legitimately putting in a claim and you get knocked back, people are scratching their heads," he said.
"If you've been upfront with your insurance company and you've paid your premiums and you put in an honest claim, most people think that claim should be followed through."
Using the Christchurch earthquake as an example, Faafoi said currently many people were confused about why their premiums had gone up or exactly what they were covered for.
Updated and clearer insurance laws should change that.
On Tuesday Faafoi released the terms of reference for the review, which were welcomed by the insurance industry's representative body.
Faafoi has said he hoped to release an issues paper for public consultation in mid-2018.
"If I find that change is warranted I'll be working towards introducing legislation in the current Parliamentary term," he said.
"I would almost guarantee if we want to modernise and make the changes we need to the insurance market there will be some legislative change."
Consumers needed to know what they were paying for, and pay a fair price, he said.
"People having insurance gives them confidence that if something goes wrong they can get back on their feet.
"That they've got a home to live in, their car can be replaced or if someone is injured or passes away you've got some money to support yourself. Business and life can't carry on if we don't have the settings right."
Money spent on premiums which should be lower was money not spent in other parts of the economy and a burden on Kiwis' back pockets, Faafoi said.
Currently there are six Acts governing insurance contracts in New Zealand, two of which date back to 1908, and many issues have been raised with the legislation.
Not enough had been done despite three law commission reports on the issue, Faafoi said.
"There have been times when we have tweaked but we haven't taken a step back and said 'okay what are the issues we need to look at in the insurance industry and the market to make it as effective as possible'."
The International Monetary Fund has said New Zealand has suggested there is a case for greater regulation and supervision of insurer's conduct, something the review will also address.
Meanwhile the Insurance Council of New Zealand (ICNZ), the industry's representative body, said they welcomed the review.
"We have set a very high bar for our members, which makes us feel very comfortable about any change which might occur in this area," chief executive Tim Grafton said.
The Fair Insurance Code, an industry best practice standard, went further than current legislation to regulate ICNZ members' behaviour.
The Code sets out how consumers and insurers must deal with each other, including covering matters of non-disclosure and complaints timelines and processes.
Any issue that cannot be solved directly with an insurer may be escalated to an independent external disputes resolution scheme, something all insurers must be members of.
There was an expectation of reasonableness, a standard decided by the external resolution scheme.
Given 95 per cent of general insurers were members Grafton said the self regulation was effective.
The ICNZ was looking forward to contributing to the review and saw it as a chance to possibly consolidate existing laws, he said.
"Out of 1.2 million insurance claims made last year to our members, only 243 complaints were transferred to external dispute resolution schemes. Of those, only 19 were fully or partially upheld."
Grafton also defended any recent rise in premiums, saying they "paled in comparison" to the $20 billion in insurance payouts following the Christchurch quakes, and the $2.5 billion insurance companies were on track to pay out by the end of this year.
A record number of claims relating to extreme weather events were also made last year, and $243 million paid out.