Insurance costs have outpaced incomes, but switching insurers could save you a lot

New Zealanders are spending far more of their income on insurance than they used to – and they may be paying considerably more by staying with the same insurer.

Stats NZ data show that in the past five years, average house insurance premiums have risen 62.3%, average contents insurance premiums have risen 63% and average vehicle insurance premiums have risen 37.5%.

Average hourly earnings, including overtime pay, have risen just 28.3% over that period.

However, data from insurance comparison platform Quashed show shopping around could reduce a household’s insurance costs by up to 36%, with the average user finding savings of $1351 a year.

In one example, quotes for comprehensive insurance cover for a 2020 Toyota Corolla in Auckland recently ranged from $960 and $1790 – a difference of almost 86%.

The platform said people should also weigh up introductory offers – like gift cards or discounts – against the premiums being offered, and how long they were likely to remain with that policy and that insurer.

“These one-off perks can mask premiums that are higher than the market average. Given the big price gaps between insurance providers, shopping around could put more money back in [the] pocket for consumers.”

Choosing a different insurer appears to be becoming harder, with a recent Consumer NZ survey found about 1% of respondents couldn’t switch insurer because no other company would provide them with insurance.

Investigative team lead Rebecca Styles told Newstalk ZB that “92% of the market is controlled by two big Australian-based underwriters, so ... we don’t really have that many insurers as such”.

While AA Insurance recently stopped offering new policies in some areas, the Insurance Council said consumers should still have options.

“In those areas where it’s become a challenge ... there are other insurers who I’m sure are still in the market who can offer [cover],” chief executive Kris Faafoi told Newstalk ZB.

A Government-initiated review is now underway to work out whether insurance is becoming unaffordable or inaccessible in parts of the country.

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