Protecting your home
Insurance, in plain English.
Buying a home means taking on cover you may never have needed as a renter. Here’s what the main types of insurance are, what each one actually protects, and where to read more from sources you can trust.
Usually required by your lender
House / building insurance
Covers the physical structure of your home — walls, roof, foundations, and often fixtures like the kitchen and bathroom — against events such as fire, storms, and natural disasters. In New Zealand almost every bank requires it to be active from settlement day, and most policies are “sum insured”, meaning you nominate a rebuild figure rather than the market value.
Watch out: Get a rebuild estimate rather than guessing — under-insuring means you may not be able to rebuild fully after a total loss.
Protects your belongings
Contents insurance
Covers the things inside your home — furniture, appliances, clothing, electronics — against theft, fire and accidental damage. It’s separate from building insurance and optional, but often bundled at a discount with your house policy.
Watch out: Do a room-by-room tally; people routinely under-estimate the total replacement cost of their belongings.
Protects your family’s home
Life insurance
Pays a lump sum to your family or estate if you die. For homeowners it’s commonly sized to clear the mortgage, so your partner or dependants can keep the house without the repayment burden.
Watch out: Review the cover amount whenever your loan balance changes — over time you often need less, not more.
Keeps repayments flowing
Income protection
Replaces a portion of your income (typically up to 75%) if illness or injury stops you working. Because your mortgage doesn’t pause when your pay does, this is one of the most relevant covers for a new borrower.
Watch out: Check the “wait period” and “benefit period” — a longer wait lowers the premium but means more time before payments start.
A lump sum when it matters
Trauma / critical illness
Pays a one-off lump sum on diagnosis of a major condition such as cancer, heart attack or stroke — money you can use for treatment, time off, or reducing the mortgage while you recover.
Watch out: Definitions vary a lot between insurers; read exactly which conditions and severities are covered.
Covers the payments directly
Mortgage repayment insurance
A more targeted cover that meets your mortgage repayments for a set period if you can’t work due to redundancy, illness or injury. It’s narrower than income protection but can be simpler and cheaper.
Watch out: Redundancy cover often has strict eligibility and stand-down rules — confirm what actually qualifies.
Read further
Trusted, credible sources
Independent, government or industry-body resources — not sales sites. Always confirm details for your own situation.
This is general information to help you understand your options — not financial advice. Speak to a licensed insurance adviser about what’s right for you.