This calculator checks whether you are underinsured in New Zealand by comparing your current sum insured against the amount you would actually need, and showing the gap and the share of your need that is covered. Underinsurance is one of the quiet risks in personal finance: everything is fine until you claim, at which point you discover your policy only pays up to its sum insured, leaving you to find the rest. It is especially common with houses, because most New Zealand policies are sum-insured rather than full-replacement, and rebuild costs have risen so sharply that a figure set a few years ago can fall well short of what it would now cost to rebuild. The same happens with contents that grow over time and life cover that is set once and never revisited as a family's needs change. You enter your current sum insured and the full replacement or cover you believe you need, and the calculator shows the dollar gap and the percentage of your need that is covered, flagging whether you are adequately insured or exposed. Use it for your house, contents, or life cover, and as a prompt to review your figures against a current rebuild estimate or a fresh inventory. Closing a gap is usually far cheaper than wearing it. General information, not advice.
If you claim, you are paid only up to your sum insured, so a gap is yours to cover. Review against a current rebuild estimate or inventory. General information only.
The underinsurance gap is the cover you need minus your sum insured, or zero if you are fully covered. The percentage covered is your sum insured divided by the cover you need. If the gap is above zero you are underinsured by that amount; if your sum insured meets or exceeds your need, you are adequately covered.
If your house is insured for 600,000 dollars but would cost 750,000 dollars to rebuild, you have a 150,000 dollar gap and are 80 percent covered. In a total loss you would have to find that 150,000 dollars yourself.
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