This information is a guide only and is not intended to replace your policy documents.
When you have replacement home insurance, such as an Echelon or Essence policy, choosing the right total sum insured is really important; but it can be tricky to get it right. We’re here to help you understand how to calculate your total sum insured and reduce the risk of you being underinsured.
It is your responsibility to set the total sum insured (including the components that make up the total sum insured) when you apply for insurance and whenever you renew your policy. It’s important you review your sums insured and keep them up to date throughout the policy period and when you renew. You can review and update your sums insured at any time by contacting us.
You need to ensure your total sum insured is up-to-date and reflects the increasing costs of rebuilding, repairing, or replacing your home. The Cordell Sum Sure calculator is a good place to start. It’ll provide you with an estimated cost to rebuild your home inclusive of allowances for professional fees, demolition and removal of debris. You should also add an allowance for future inflation to cover any increased building and repair costs over the course of your insurance and the rebuild period.
Your use of the calculator is subject to terms and conditions, which you can find when you open the calculator. The estimated rebuild cost is a guide only and is not intended to replace a professional valuation or quantity surveyor estimate. Not all prepopulated information provided by the calculator will necessarily be accurate for your home and it is your responsibility to correct any inaccurate information. You must decide whether the estimate is appropriate or if you should amend it based on your knowledge of your home and property.
When you take out your replacement home insurance policy, such as an Echelon or Essence policy, we’ll ask you for the total sum insured, which is made up of the home sum insured and any sums insured for special features. It is the maximum amount (with any applicable excesses deducted) that is payable for the rebuild of your home in the event of a total loss – for example, if your house burnt down, was destroyed in an earthquake or suffered significant damage from flooding.
The Echelon policy includes specified sub-limits for retaining walls and recreational features within the home sum insured. You will need to arrange additional cover if the specified sub-limits are not enough to replace those features. If you have an Essence policy, there is no cover for retaining walls and recreational features unless we’ve agreed to cover them – please contact us if you need cover for these.
It’s important to check your sums insured each year. They need to take into account rising building costs, inflation and any changes you’ve made to your home.
Your total sum insured should cover the full cost of rebuilding your home to its equivalent size and quality, including the cost of demolition, consents and other fees. These costs can change over time, so it’s important you regularly review and keep your total sum insured up-to-date. If you set it too low and you need to repair or rebuild your home, you may:
When working out your replacement value sum insured, you’ll need to consider a range of things about your current home and the cost to rebuild it. These include:
Remember to include any recreational features (such as swimming pools and tennis courts), retaining walls or special features (such as a bridge or cable car) that would increase the cost to rebuild your home. You will need to add extra cover for recreational features or retaining walls if the cost to rebuild them is more than the policy limit or your policy does not automatically cover these items. If you have special features, remember to tell us what they are and what they would cost to rebuild as they are not automatically covered. Make sure you check your Policy Wording for everything you need to include in your sum insured.
Are you new to Lantern? Been with us for couple of years? Built or bought a new house? Don’t know where to begin? Take a look below to see where you fit in.
Thanks for choosing us. To get a quote you’ll need to calculate your Sum Insured.
You can use the Cordell Sum Sure calculator or contact an expert.
You will need to:
We appreciate the trust you put in us to insure some of your most treasured possessions.
It’s a good idea to review your Sum Insured at least every year due to the changing cost of construction, or if you’ve made any changes or additions to your property since you last reviewed your Sum Insured .
You will need to:
Congratulations. It’s no easy feat building or buying a house.
It’s important not to rely on the market value or purchase price to work out your Sum Insured as the cost to rebuild can often be very different than the cost to purchase a home. If you have recently built a house, you could use the build cost, but remember to add the cost of demolition, consider all parts of your home that are covered by the policy and inflation that may have occurred since that build price was agreed.
You will need to:
Use the Cordell Sum Sure calculator
The Cordell Sum Sure calculator helps you to estimate your Sum Insured. It saves you a lot of leg work by pre-populating your property information, which you can then check and update to provide a more accurate estimate. The calculator draws on publicly available data from around New Zealand about many aspects of home construction and reconstruction and is updated regularly.
The calculator includes professional fees, demolition and removal of debris and will account for price difference in some of these services throughout New Zealand. While every care is taken to provide a reliable result, the estimated rebuilding cost produced by the calculator is intended as a guide only. It also doesn’t take into consideration rising building costs over the period of your insurance policy. If you want to include an allowance for this in your Sum Insured, you’ll need to add it to the estimate produced by the calculator.
The calculator also doesn’t include GST in its estimate because your Lantern policy doesn’t require GST in the Sum Insured. GST is payable in addition to the total sum insured for Lantern home policies.
If you have any Special Features (such as a bridge, cable car or jetty) you will need to add this on top of the estimate the calculator produces as well.
If you want more peace of mind that your Sum Insured is accurate, it might be useful to get a professional to assess your property. If you live in a home greater than 500sqm, or higher value than $2 million, or an architecturally designed home, this is strongly recommended.
Construction Cost Consultants are registered professionals who can provide residential valuations at a competitive price for Lantern customers. Contact them below:
Alternatively try other registered professionals, such as:
This calculator provides an estimate Sum Insured for your home but the final decision is yours, so if you think your amount is not correct you can change it. This is general information and is not a recommendation, opinion or guidance. If you would like a recommendation please contact a registered valuer or quantity surveyor. This calculator information does not provide any advice or opinion on the extent or adequacy of the cover provided by Sum Insured insurance. This information is not personalised financial advice and does not take into account your particular situation. You must make your own decision on the Sum Insured that is appropriate for your circumstances.
The Cordell Sum Sure calculator is an independent tool. Lantern doesn’t have access to the information you enter, or access to the estimate that it produces, so if you’d like to adjust your home’s Sum Insured, or add additional cover for retaining walls, Recreational Features like swimming pools and tennis courts or Special Features like bridges, you’ll need to contact us. It’s your responsibility to ensure that your Sum Insured is adequate.