Cost-of-living cooldown: Insurance price hikes are over but higher prices are the new normal

The steep hikes in insurance premiums now appear to be over, but New Zealanders are still paying far more for insurance than they were three years ago.

Latest Stats NZ data shows insurance prices have risen just 4% in the past year but are 28.8% higher than three years ago.

The average quote for one house policy, one contents policy, and one comprehensive car policy on comparison website Quashed has increased just 2% in the past year, but is 34% higher than three years ago.

House insurance premiums have risen the most, increasing 5.6% in the past year and 56% in the past three years.

Contents insurance prices have risen by 9.3% in the past year and 55.3% over the past three years.

Vehicle insurance premiums dropped 0.8% in the past year but remain 30.6% higher than three years ago.

Health insurance has risen by 1.6% in the past year, but is up 40.5% over the past three years.

The Insurance Council has attributed the higher house and contents premiums to rising costs, including higher reinsurance premiums after the 2023 storms.

Premiums have risen faster for quake-prone properties in Wellington and flood-prone properties near flood plains and rivers in Canterbury.

Vehicle insurance premiums rose when new car sales increased, prompting more people to switch to third-party policies, but that trend has been reversing since new car sales slowed down.

Quashed chief executive Justin Lim said people were paying more for insurance than they were in 2022.

“For a one-house, one-car, one-contents insurance household, you’re still looking at roughly about $5000. For a two-car household, you’re looking at roughly $6000.”

Those who shopped around between insurers tended to pay less than those who let their policies roll over.

He said that was particularly the case for car insurance, where average premiums have dropped 9% in the past year.

“Take, for example, a Toyota Aqua. One insurer might be offering you $950. Another might be offering you $2000.”

Michael Sergel is Newstalk ZB’s business reporter, covering the daily life of business and the business of daily life. He’s been covering business, politics, local government and consumer affairs for over a decade.