By John Grant NZI has launched a new 'Essence' product aimed at the price conscious consumer, one with limited cover, a high excess, and a low price. It looks positioned to cover ground that has been well targeted by the likes of AMI, AA Insurance and Tower. This is the third new policy launched by NZI over the last few months. They have product offerings from the top end with the Distinction branded policy, the Echelon brand targeting the not so price focused buyer who wants the broad all encompassing policy, and now this new Essence Home and Contents cover. "Essence was developed in response to a number of broker's requests for an alternative domestic product that will suit the more price-conscious client" said John Chandler, an NZI spokesperson.
It is expected that Essence premiums will be about 16-19% cheaper for buildings and 21-24% cheaper for contents. However with a $500 excess this is the minimum level of premium reductions that you should expect. Cover under the building policy has relatively few differences to their other products, however it does not cover 'Hidden Gradual Damage', an issue subject of quite a few claims claims, nor other events like 'Breakage' (glass, handbasin, toilet, etc.). Blocked water and sewage pipes are also not covered. The contents cover has been curtailed in a number of places. The 'Temporary Removal' clause excludes 'Theft' unless it is the result of forcible and violent entry, and so this is very restrictive. Its insurance-jargon meaning is that a claim will only apply if there are signs of forced entry to the premises. Another major difference is the introduction of a 10 year age limit on items covered for replacement value. Under the more expensive Echelon and Distinction policies, no age limits apply. A number of other features included in the Echelon and Distinction policies either do not apply or have had their limits reduced. This new 'Essence' approach will likely suit those looking for an economically priced policy where they are willing to trade some features to lower the cost. The savings maybe attractive from an annual payment perspective but you could well end up with a significantly lower payout when you need to claim. Insufficient details have so far been released to be able to review the specific pricing of this product. All we do know is that it is priced between 16-19% below the building prices of the mid-range Echelon policy and 21-24% below the Echelon contents prices which you can see here on our comparison pages. The new policy will only be available via brokers and we understand that it will be released through the NZI Lantern branded network in February. Overall it will fill a need but with a $500 excess for Home and Contents and a reduced level of cover, you are probably better to have a close look at some of the other policies on the market that are priced similar to this, have less excess and similar premiums. You can see the pricing comparisons for buildings here and the contents comparisons are here. Cover comparisons can also be found here for buildings and here for contents. We will update our comparison pages as soon as we have the required information to enable us to do so.