The property insurance environment in New Zealand is undergoing meaningful legal and regulatory change. For landlords, homeowners and property investors, staying informed isn’t just prudent — it’s essential for managing risk and ensuring appropriate cover remains valid.
- New Insurance Contract Law: the Contracts of Insurance Act 2024
The Contracts of Insurance Act 2024 is reshaping the foundations of insurance law in New Zealand and will continue to be phased in through to 2027. It modernises how insurance contracts are interpreted and administered:
- Disclosure duties for policyholders have been reformed.
- Good faith obligations are now codified.
- Insurers must pay claims within a reasonable time.
- In some circumstances, third parties owed liability by the policyholder may claim directly against the insurer.
This law applies across insurance types — including property insurance — and carries implications for policy wording, sales practices and claims handling.
2. Fire Emergency New Zealand (FENZ) Levy Changes from July 2026
From 1 July 2026 new FENZ levy rules come into force:
- The fire levy on property insurance will be calculated on the sum insured (full replacement value) rather than the indemnity value for commercial buildings.
- Mixed-use properties (residential + non-residential) will be split into separate classes for levy purposes, affecting cost calculations.
This change can increase the fire levy on some commercial property policies even if the rate per $100 is lower, because the base calculation changes.
3. Building Law Reform & Insurance Requirements
Significant reforms to the building regulatory regime are advancing in Parliament and expected to progress through 2026:
- The current joint and several liability regime for building defects is being replaced by a proportionate liability model.
- The Government is also proposing mandatory home warranties for new residential builds and renovations and professional indemnity insurance for architects and engineers involved in design work.
- Disciplinary penalties for licensed practitioners are set to increase, reinforcing obligations around compliance.
Once passed, these changes are likely to have a significant impact on builders’, designers’ and potentially owners’ insurance obligations and costs.
4. Resource Management Act Fines Are Now Uninsurable
As of 20 August 2025, the Resource Management (Consenting and Other System Changes) Amendment Act 2025 made it unlawful for insurers to indemnify policyholders for fines and infringement fees under the RMA.
- This aligns environmental liability treatment with other regimes such as the Health and Safety at Work Act.
- Insurers may still cover defence costs, remediation costs and legal costs, but fines themselves now must be borne by the offending party.
This change affects statutory liability cover, including for property owners and developers in environmental enforcement contexts.
5. Climate & Hazard Risk Awareness Influencing Insurance Availability
Insurance providers continue to adjust risk appetite in response to climate-related hazards:
- Some major insurers have temporarily halted issuing new home and landlord policies in high-risk flood or earthquake exposure areas as at early 2026.
- This reflects a broader trend in the industry toward property-specific risk pricing and retreat from certain high hazard zones.
Understanding how insurers classify natural hazard risk is now a key part of property insurance planning in NZ.
Key Takeaways for Property Owners & Investors
– Review policy wording and understand how new disclosure and claims obligations under the Contracts of Insurance Act affect you.
– Revalue policies to reflect updated fire levy bases from July 2026.
– For landlords, notify your insurer and ensure you have the correct landlord insurance, as standard home insurance may not apply once the property is tenanted.
– If developing, renovating or buying new builds, monitor the progress of the building liability reforms – they will affect indemnity, professional risk and warranty expectations.
– Factor in evolving climate risk assessments and insurer risk appetite to future-proof your cover.
