INSURANCE · NEW ZEALAND · 4 MIN READ
What would your insurance actually pay?
Home and contents policies can settle losses differently. Check the wording for each, not just the total insured.
By Mynestvive · Reviewed 7 November 2026
Start with the contract you have
Find your policy wording, current schedule and any endorsements. Look for “basis of settlement”, the sum insured, excesses and item limits. A headline saying “replacement” does not explain every exception. Ask your insurer how the wording applies to your belongings and house.
Sources: AA Insurance — Contents policy, including settlement methods and limits
Replacement and indemnity are different promises
For contents, replacement cover generally pays towards repairing or replacing an item with an equivalent new one, subject to the contract. It does not necessarily mean a cash payment at the shop price or an upgrade to the latest model.
Indemnity or present-value settlement allows for age, condition and depreciation under the policy wording. A second-hand asking price is not necessarily the value your insurer will use. Imagine a five-year-old television: a comparable new television might cost NZ$1,400, while its assessed value before the loss might be NZ$350. These are invented figures to explain the difference, not a depreciation formula. The policy decides which basis applies.
The limit matters as much as the method
For contents, the sum insured is the overall insured limit, not the basis used to settle every item or an automatic payout. Categories such as jewellery or collections can have their own limits. Some items may need to be specified separately. If an item has an agreed value, check that the insurer has actually accepted that value and on what terms. An amount you enter into an app is not an agreed insurance value. Your insurer may require an independent valuation, particularly for jewellery. Check endorsements, exclusions and category or item limits, including when each applies.
Sources: AA Insurance — Contents policy, including settlement methods and limitsICNZ — House and contents cover explained
A house has more than one value
Purchase price and market value include things a rebuild estimate does not, such as land and location. Rebuild cost concerns reconstructing the building. Ask whether demolition, professional fees, difficult access, site works, code requirements, inflation and GST are included. Fixed-sum and replacement policies can treat limits differently.
In Mynestvive, keep contents estimates separate from the sourced house rebuild figure. Record the date and assumptions. Use the resulting record to ask better questions at renewal; the app does not choose your cover.
ILLUSTRATIVE EXAMPLE
One sofa, three different figures
Imagine you paid $1,100 for a sofa. A similar sofa sells second-hand for $400, and an equivalent new one costs $1,350 today. Keep those three figures separate in your record. The receipt answers what you paid. The quote helps answer what replacing it would cost. Your policy wording determines the settlement basis and applicable limits. A second-hand asking price is not necessarily the insurer’s present-value or indemnity assessment.
Walk the rest of the room. A rug, lamp, curtains and books can add up even when none feels worth listing alone. A room-by-room pack gives you something concrete to review with your insurer, including items you still need to price.
YOUR NEXT STEP
A few things you can do now.
- Find the wording and schedule for this policy period.
- Ask which contents get replacement cover and which get present-value or indemnity settlement.
- Check endorsements, limitations, specified items, valuation requirements and excesses.
- Review contents and rebuild figures separately with your insurer.
Read the source material
- AA Insurance — Contents policy, including settlement methods and limits ↗
- ICNZ — House and contents cover explained ↗
- ICNZ — Replacement and indemnity cover ↗
Links checked during research on 7 November 2026. Policy terms and local requirements can change. This guide explains the topic; your own contract and circumstances matter.
This guide uses New Zealand sources and examples. It is not an Australian or UK legal or insurance guide. Mynestvive organises your records; it does not certify a property or guarantee an insurance or sale outcome.