State Insurance Review — What You Need to Know

State Insurance Review — What You Need to Know

State is one of the biggest names in New Zealand general insurance, and it has been for a long time. It sells car, house, contents, boat, caravan and landlord cover, and it sits inside IAG — the same Australian group that owns AMI and NZI. AMI and State are owned by the same parent but price differently, which is worth remembering when you are collecting quotes.

Here is the thing most people get wrong about any insurer review, State included. The brand promise is not the product. What actually matters is the policy wording, the excess you agree to, and whether your sum insured would genuinely cover a rebuild. State's claims setup is a real strength. But no claims network rescues you from a sum insured that was set too low three years ago and never reviewed.

So we have written this as a guide to the decisions rather than a scorecard. We look at what State offers, how it compares with the rest of the market, and where the gaps sit — including the ones that are nothing to do with State at all.

How We Researched This Guide

We worked from provider pages and published policy documents rather than from anyone's summary of them. That meant going to insurer sites directly, reading product wordings, and pulling the public scheme rules from the source — the Natural Hazards Commission, ACC, the Financial Markets Authority and MBIE. Where a figure came only from a third-party comparison site, we left it out. That is why you will not find a dollar premium estimate anywhere in this piece.

One detail that surprised us: the Natural Hazards Commission's building cap sits at $300,000 plus GST per dwelling per event, and it rose from $150,000 plus GST on 1 October 2022. The levy that funds it is 16 cents per $100 of cover, capped at $480 plus GST a year. Treasury has advised that 16 cents is not enough to meet the scheme's long-term costs and recommended lifting it to 24 cents, but that review is paused. The rules themselves sit in the Natural Hazards Insurance Act 2023 on legislation.govt.nz.

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The Quick Summary (60-Second Version)

If you only read one part of this guide, read this bit.

• State is owned by IAG, which also owns AMI — the two price differently, so quote both rather than assuming they are the same.
• Car insurance is not legally required in New Zealand. ACC covers injuries, not vehicles, so an at-fault driver is personally liable for the damage they cause.
• The Natural Hazards Commission pays first after an earthquake, but only up to $300,000 plus GST. Anything above that comes from your own policy.
• ACC covers injury, not illness. A cancer or heart disease diagnosis gets no income replacement and no treatment funding from ACC.
• Agreed value fixes your car payout when you take out the policy. Market value pays what the car is worth at claim time, which is usually less.
• Life insurance is for people with someone relying on their income. No dependants and no shared debt usually means it is not the priority.

Where State Sits in the New Zealand Market

State writes car, house, contents, boat, caravan and landlord cover. Its scale is the real story: a nationwide network of claims handlers and approved repairers, and digital claims tools that hold up when a big weather event lands and thousands of claims arrive at once.

AA Insurance guarantees its repairs for the life of the car, even if you sell it. That is a specific, checkable promise, and it is the kind of thing worth comparing directly rather than assuming. AA's third party, fire and theft option covers liability up to $20 million, pays up to your agreed value for fire or theft, and repairs window glass, locks or ignition damaged by attempted theft. All AA car policies run 12 months and can be cancelled any time without a fee.

Tower is a New Zealand listed insurer using risk-based pricing informed by data, with a strong app and digital claims process. Cove, Vero and NZI also write car cover. The practical move is to get three quotes on identical cover levels, because the cheapest headline premium is often the one with the thinnest wording.

Agreed value versus market value

What moves your premium

Home, Contents and the Cap That Catches People Out

Here is the part of home insurance that quietly ruins people. The Natural Hazards Commission covers natural hazard damage automatically if you hold a home policy that includes fire insurance, which most do. The premium you pay your insurer includes the levy. You cannot buy extra cover from the Commission, and you do not buy it separately.

The cap is $300,000 plus GST per dwelling, per event. Your cap can actually be lower than that if your own replacement sum insured is lower. Anything above the cap comes from your private policy, subject to your sum insured. That is why the sum insured on your home policy matters far more than the cap does.

The scheme targets earthquakes, volcanic eruptions and tsunamis, and to a much lesser degree storm and flood, where only limited land damage is covered. Limited land cover is included, based mainly on market value — bare land is not covered. The Commission does not cover driveway surfaces or landscaping. Your private insurer may.

What the Commission does not do

Contents and specified items

The Cover Most People Forget to Check

ACC covers everyone in New Zealand — children, beneficiaries, students, the unemployed, the retired and visitors. It does not matter who was at fault. In exchange, you give up the right to sue for personal injury in most circumstances.

What it covers is physical injury caused by accident: sprains and strains, wounds, burns, fractures, dislocations, dental injuries, hearing loss, concussion and loss of consciousness. It also covers gradual process conditions caused by your work, treatment injuries, and maternal birth injuries from 1 October 2022. Claims go through a medical professional and can be made up to 12 months after the injury.

What it does not cover is illness. If you are diagnosed with cancer, heart disease, stroke, diabetes or kidney failure, ACC provides no income replacement, no treatment funding and no rehabilitation support. That gap is exactly why private health and life cover exist. Around 30 per cent of New Zealanders hold private health insurance, and Southern Cross returns 94 cents of every premium dollar it collects as claims.

Health insurance, honestly framed

Life, trauma and income protection

Questions You Might Have

Is car insurance compulsory in New Zealand?

No. ACC covers personal injuries, not vehicles or property. If you cause a crash, you are personally liable for the damage to the other person's car, and that bill can be large. Third party only is the minimum sensible position; comprehensive is worth pricing if you could not comfortably replace your own car from savings.

Do I need extra cover on top of the Commission cap?

Yes, in most cases. The Commission pays towards rebuilding or repairing your home up to $300,000 plus GST per dwelling, per event. Anything above that comes from your own policy, subject to your sum insured. A homeowner insured for less than the rebuild cost is underinsured no matter how the cap is described.

What does ACC not cover?

Illness, conditions related to ageing, and emotional issues. A cancer, heart disease, stroke, diabetes or kidney failure diagnosis brings no income replacement, no treatment funding and no rehabilitation support from ACC. Private health and life cover exist to fill that gap, not to duplicate ACC.

Should I use a broker or buy direct?

Buying direct is often cheaper on simple standard risks, because there is no commission in the price. A broker earns their place on complex or unusual risks, commercial cover, and when a claim turns difficult. Ask which insurers they hold accreditations with, how they are paid, and whether a fee applies on top of commission.

What should I compare at renewal?

Definitions, exclusions, waiting and benefit periods, how partial payments work, reinstatement terms, and stepped versus level premiums. Stepped premiums rise as you age; level premiums are averaged out and cost more at the start and less later. Then compare the sum insured and the excess, because those two numbers decide what actually happens at claim time.

What Matters Most

State is a solid, large-scale insurer with a claims network that performs when it matters. That is worth something. But the review you actually need is not of State — it is of your own policy. Check the sum insured on your house against a real rebuild figure. Check whether your car is on agreed or market value. Check whether anyone depends on your income.

The market is competitive enough that the brand on the certificate matters less than the wording underneath it. Get quotes from State and AMI separately even though they share a parent. Compare them against a direct insurer and a broker placement on identical cover levels.

Then read the exclusions. That is where the difference between a policy that pays and one that does not actually lives.