Quashed data shows people who auto-renew insurance pay more than those who switch as government launches probe into insurance affordability

The Government is launching a six-month review into home insurance affordability and costs.

Finance Minister Nicola Willis and Commerce and Consumer Affairs Minister Scott Simpson are directing the Council of Financial Regulators and government agencies to work with the insurance sector to look at what's driving residential insurance pricing and affordability, according to a 1News report.

"We know that the insurance industry has really good data about who's insured, how much it's costing, and we want to know what are they seeing in the trends of whether people are lessening their cover, how they're responding to those price increases, and what can we expect for the future," Willis told 1News.

The Government has previously hinted at looking into the insurance sector, with Simpson saying they would be looking at "necessary initiatives in the area" and a Treasury document called Insurance affordability work options, released under the Official Information Act, looked at things like insurance price growth, competition and solvency.

The document says a range of factors have contributed to insurance price growth - this includes insurer reassessments of seismic and climate-related risks, rising construction costs, significant catastrophic event losses, developments in global reinsurance markets and insurance availability in some regions have been reduced.

Insurance availability has recently come into question with reports of AA Insurance temporarily suspending new house and landlord policies in places like Westport and Canterbury. 

On the review, Insurance Council of New Zealand chief executive Kris Faafoi told 1News: "We'll work with the Government to make sure that they can get the answers, because we want to make sure that insurance in the long term is accessible and affordable for all New Zealanders."

Auto-renewing costs more than switching

On the ground, insurance comparison website Quashed has been keep track of insurance policies.

In their recently-released quarterly index, Quashed found New Zealanders who auto-renew their insurance cover are paying an average of $1351 more than those who switch.

The data comes from Quashed’s 2025 fourth quarter and chief executive Justin Lim says this $1351 figure is for general insurance (Quashed counts this as one house, one contents and one comprehensive car insurance policy). It is the highest gap they’ve recorded, he says.

Lim says this figure is based on people uploading their existing policies into Quashed and then doing a market scan to compare their cover with other policies out there.

Calling it a “loyalty tax”, Lim says: “What we’ve seen over time as well as what we know is true of consumer behaviour in New Zealand is most Kiwis still aren’t in the habit of shopping and comparing their insurance policies.”

Traditionally, New Zealanders often left their insurance alone - so to see this gap shows the potential savings people could make, he says.

On the other side and someone Quashed gets lots of queries about from customers are multi-policy discounts, Lim says.

Quashed lets people upload their insurance policy documents so they can easily read about detailed information on their plans, costs and renewal dates. Around 100,000 people have used the platform. The website also has a comparison tool which analyses and compares different policy options.

Multi-policy discounts are when insurers offer discounts if people buy more than one policy from them. These discounts can range from 5% to 20% depending on how many policies people buy.

Many general insurers in New Zealand have phased out multi-policy discounts.

Lim says there’s less incentive now more than ever before for getting your insurance cover all from one place.

“Based on previous research we did, what we could see was that when you are shopping around for car or contents or house policies separately, you could potentially find cheaper, better cover.”

So for consumers, Lim says, now is a great time to shop around.

“The rewards there or the discount could actually be much more substantial than putting it all in one place and having it all with one insurer.”

He also cautioned people to weigh up the benefits and long-term costs when it comes to extra incentives - like gift cards - that insurance companies may be offering to new customers.

“We go back to typical New Zealand consumer behaviour, when it comes to insurance, you typically hold that policy for quite long, so if you are getting up front a $50 or even $200 gift card, and you've held that policy for a good five years or something like that - when you weigh up the cost versus the benefit, there’s probably quite little benefit in terms of a one-off incentive like this.”

Car insurance premiums climb 6% from previous quarter

Insurance data from Quashed’s 2025 fourth quarter (Q4) report shows general insurance - Quashed considers this one house, one contents and one comprehensive car insurance policy - went up 2% compared to a year ago, with people paying an average premium of $4959.

This means the average general insurance premium saw a rise to $4959 from $4852.

In the December quarter, there was also a 4% jump in house insurance and a 3% rise in contents insurance.

For house insurance, compared to a year ago, the average premium was up $2815 from $2704 while the average premium for contents insurance had increased to $847 from $823.

While comprehensive car insurance premiums appear down 2% year-on-year, there had been a quarterly increase of 6% (this is a jump of $75).

Lim says the quarterly increase for car insurance premiums is not small, considering they were noticing a trend of stabilising premiums.

“So to see it climb 6% in a quarter - that signalled to us that premiums are back on the rise.”

The average premium for comprehensive car insurance this quarter was $1298 compared to $1325 a year ago.

People who used Quashed found cheaper car insurance 80% of the time and on average could save $367.

Users also saved with cheaper house insurance 61% of the time and on average could save $673 and cheaper house insurance 78% of the time, saving $311.

Regional break-down

Auckland saw the highest decrease when it came to house insurance premiums, compared to Wellington and Canterbury.

Auckland’s average house insurance premium went from $2210 to $2004 - a 9% decrease year-on-year.

Wellington saw a 1% year-on-year decrease, with the average home insurance premium going from $4446 to $4394, while Canterbury also saw a 1% dip, from $2817 to $2778.

When it came to comprehensive car insurance premiums, Auckland saw a 5% year-on-year fall, moving from $1600 to $1510.

Canterbury saw a decrease of 1% year-on-year, with the average car insurance premium shifting from $1230 to $1215.

Meanwhile Wellington saw a slight decrease year-on-year with the average car insurance premium moving from $1155 to $1152.

As for the average contents insurance premiums in Wellington, there was a 11% increase year-on-year, going from $990 to $1094. Auckland fell 6%, from $754 to $710.

In Canterbury, average contents insurance premiums had a minor change year-on-year, going from $891 to $896.

For general insurance, Auckland saw a year-on-year decrease of 7% - going from $4564 to $4224. Meanwhile Canterbury saw a year-on-year decrease of 1%, falling from $4938 to $4889.

Wellington saw a 1% year-on-year increase for general insurance - going up from $6591 to $6640. 

Consumers being more proactive

Lim says Quashed has seen more New Zealanders shopping around over the last few years as “premiums have actually crept up more than 50% over the last four years, people are feeling the pain and so more and more people are starting to look at this”.

“We are starting to see momentum and a shift in consumers being more proactive … We’ve seen a growing recognition of the importance of insurance with all the weather events we’ve had.

“We’ve seen that growing importance, that growing focus and also that growing consumer interest in insurance.”