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Where you live is a major factor in setting premium levels for House, Contents and Car insurance

Where you live is a major factor in setting premium levels for House, Contents and Car insurance

By John Grant

If you look at any of our premium scenarios you will see that prices vary significantly from one region to another.

Even in the major cities, the price for insurance can and does change from one neighborhood to another.

Taking Contents insurance as an example, $120,000 cover in Browns Bay, Auckland, will cost you $457 with State, but $598 if you live in the South Auckland suburb of Papatoetoe. That's a 30% higher premium in Papatoetoe. Does this mean that the risk is that much greater, and why is this not consistent from one insurance company to another?

Our example is for mid-priced insurance cover with a good product score. But between insurers, prices also vary markedly - in this example by a whopping 130% between the lowest and highest.

The reasons are quite straight forward and reflect the claims experience of each individual insurer. It is all about the crime-rate. If you live in a neighbourhood where crime rates are higher, then you can expect to pay a higher premium. Those who live in lower crime-rate areas will pay less.

Premiums in Auckland are most the expensive and those in Dunedin and Invercargill are some of the cheapest.

A TV set will cost pretty much the same from one part of the country to another so it's the likelihood of burglary that will influence how much you will be charged. Staying with the above example, the premium for $120,000 of Contents insurance is the lowest in Dunedin where State will only charge $323, and that is 45% less than for Auckland's Papatoetoe.

Crime rates are at their lowest in southern New Zealand and insurance pricing reflects this. Insurers also appear to use their pricing to discourage business from neighborhoods where their claims experience makes cover a marginal business proposition.

Car insurance premiums are also affected by crime rates as well as accident rates and traffic densities - the more cars on the road the more chance you have of being involved in an accident.

The higher the accident rate in the region then the more the insurer needs to charge for the risk they are taking when they provide you with cover.


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I've often wondered why vehicle insurers don't pay more attention to whether a car is regularly parked offstreet in a garage versus on the street (which signifcantly increases the risk of a break in/theft).