What makes up my premium?
Your insurance premium is the payment you make to insure your assets, such as your home and contents, vehicles, or farm machinery. It consists of several components:
FMG's premium share
The amount of premium you pay to FMG is determined by the specifics of what you’ve insured. It covers paying claims, the costs of running FMG, and the cost of purchasing reinsurance. Reinsurance serves as FMG's own insurance, designed to cover significant claim events. It is a safety net, ensuring our capability to handle large-scale claims that might occur during major events, such as Cyclone Gabrielle.
As a mutual FMG's members are its owners so any profits generated are reinvested into the business, ensuring we can be here for another 119 years. You can find more about what it means to be part of a mutual here.
Government’s premium share
This share depends on what type of insurance you have and can consist of three main elements:
Fire and Emergency (FENZ) Levy: A mandatory levy for certain policies covering fire risks. It funds Fire and Emergency New Zealand’s services, including response to fires, vehicle incidents, floods, hazardous substance spills, medical emergencies, and animal rescues.
Natural Hazards Insurance Levy: The Natural Hazards Commission Toka Tū Ake provides cover up to a certain amount for damage to residential homes in the event of a natural hazard. As your insurer we collect this levy through your premium.
Please note: effective July 1 2024, the Earthquake Commission will be renamed the Natural Hazards Commission Toka Tū Ake. The new name reflects the expanded coverage for natural hazards like earthquakes, tsunamis, natural landslides, and volcanic activity. More information is available here.
Goods and Services Tax (GST): GST is applied to most goods and services in New Zealand, including insurance.
Why has my premium gone up?
Premium costs are shaped by many factors. These include inflation, government levy changes, and the growing frequency and cost of claims from severe weather and natural hazards (natural disasters) like storms and earthquakes. These events, both local and global, have raised reinsurance costs.
The increasing cost to rebuild or replace insured items, due to rising labour, material, and equipment costs, also affects premiums.
As more data on natural hazards and perils like earthquakes and floods becomes available, the insurance industry in New Zealand is moving towards reflecting more of that risk in individual premiums.
Rural areas face unique risks which are reflected in their products and pricing. In some rural regions, less developed infrastructure and limited-service access can increase claim costs, including the extra expenses of transporting materials or workers to remote locations.
House and Contents Excess Increase
To help balance pricing increases and to ensure the long-term sustainability of the Mutual, we have increased the standard excess for our Domestic House and Contents policies. The new excesses will automatically update on your policy renewal date. Learn more.