Tower Insurance Review

Tower Insurance Review

Tower is a New Zealand listed insurer that writes car, home, contents, boat and landlord cover, and it leans hard into risk-based pricing — the idea that what you pay should reflect the actual likelihood of a claim rather than a flat rate for everyone. That approach, plus a strong app and a digital claims process, is the core of the Tower pitch.

Here is the part that matters more than any brand comparison. Tower sells you a policy on top of two public schemes that quietly shape what your private cover actually does. The Natural Hazards Commission pays first on earthquake damage, up to a cap, and ACC covers personal injury but not illness. Get those two wrong in your head and you can be fully insured on paper and badly underinsured in practice.

We have kept this guide to what we can point to in Tower's own material, the Reserve Bank, ACC, the Commission and legislation, rather than premium estimates that change weekly.

How We Researched This Guide

We worked from provider pages and published policy documents, then checked the public schemes against their own sources — naturalhazards.govt.nz, acc.co.nz and the Treasury. The Natural Hazards Insurance Act 2023, which replaced the Earthquake Commission Act 1993 and took effect on 1 July 2024, is set out in full on legislation.govt.nz, and it is the reason older guides still talk about EQCover.

Two things surprised us. First, the Commission's building cap of $300,000 plus GST can be lower than that if your own sum insured is lower — the cap is not a guarantee, it is a ceiling. Second, Treasury has advised that the levy rate is not enough to meet the scheme's long-term costs and recommended lifting it, but the Minister of Finance paused that review pending an affordability review. So the rate is unchanged for now, and nobody should plan around a figure that has not been set.

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The Quick Summary (60-Second Version)

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

• Tower is a NZX-listed insurer using data-driven risk pricing, with a strong app and digital claims — good for straightforward household cover.
• Its car policies sit in the same three-tier market as everyone else: comprehensive, third party fire and theft, and third party only.
• Car insurance is not legally required here. ACC covers injuries, not vehicles, so an at-fault driver is personally liable for the damage they cause.
• On earthquake damage, the Natural Hazards Commission pays first, up to $300,000 plus GST per dwelling per event, and your policy responds above that.
• The maximum Natural Hazards Insurance levy is $480 plus GST a year, about $552 including GST, and it is built into your premium.
• Tower's real advantage is speed and price on simple risks. Complex properties and high-value items still reward a broker.

Where Tower Sits in the Market

New Zealand general insurance is dominated by a handful of large groups. AMI and State are both owned by Insurance Australia Group but price differently, which is why getting both quotes is worth the ten minutes. AA Insurance, Vero and NZI are the other names you will meet, alongside newer direct players like Cove.

Tower's differentiation is not the product wording — a comprehensive car policy is broadly a comprehensive car policy. It is the pricing model and the service channel. Risk-based pricing means your age, driving history, where the car is parked overnight and the make and model all feed the quote. That can work in your favour if you are a low-risk driver in a low-risk suburb, and against you if you are not.

The trade-off is the absence of branches. Everything runs through the app, the website or the phone. For most households that is fine, because insurance is a product you touch twice a year. If you want someone to sit down with you and walk through a complex rebuild assessment, that is a different kind of insurer.

Car cover: the three levels, plainly

The honest test is whether a write-off would wreck your finances. If it would, price comprehensive even on an older car. If it would not, third party only is a fair bet, not a reckless one.

The Public Schemes Behind Your Policy

Two schemes sit underneath every private policy in New Zealand, and misunderstanding either one is how people end up underinsured.

The Natural Hazards Commission

Cover is automatic if you hold a home policy that includes fire insurance, which most do. You do not buy it separately and you cannot buy extra from the Commission. The cap is $300,000 plus GST per dwelling, per event, paid towards rebuilding or repairing your home after a natural hazard event. Limited land cover is included, based mainly on market value, focused on the land under and around the home and driveway. Bare land is not covered.

Here is the trap. The Commission pays first, but only up to the cap — and your cap can be lower than $300,000 plus GST if your own replacement sum insured is lower. Anything above the cap comes from your own policy, subject to your sum insured. A homeowner who insures the house for less than it would cost to rebuild is underinsured no matter how the cap is described.

The scheme targets earthquakes, volcanic eruptions and tsunamis, and to a much lesser degree storm and flood, where only limited land damage is covered. Driveway surfaces and landscaping are not covered by the Commission, though your private insurer may offer that.

ACC, and the gap it leaves

ACC covers everyone in New Zealand, including children, students, the retired and visitors. It is no-fault, funded by levies on wages, fuel and businesses, and in exchange you give up the right to sue for personal injury in most circumstances. It covers physical injury from accidents, gradual process conditions caused by your work, treatment injuries, and maternal birth injuries from 1 October 2022.

Home, Contents and the Sum Insured Question

Home cover responds to the standard set of risks, with the sum insured based on estimated rebuild cost. That number is yours to get right, and it is the one figure where a rough guess costs real money. Construction cost inflation gets applied automatically each year, but automatic adjustment does not fix a starting figure that was too low.

Contents cover handles household items against loss, theft and damage, including items temporarily outside the home up to set limits. Valuable pieces — jewellery, watches, cameras — generally need to be specified separately to be covered at full value rather than the standard sub-limit. Most contents calculators walk room by room, which is tedious and also the only reliable way to land on a sensible number.

For earthquake damage, your Tower policy sits above the Commission's cap. That is the whole structure: public scheme first, private policy above it. Temporary accommodation cover typically applies if the home is uninhabitable after a covered event.

Questions You Might Have

Is car insurance compulsory in New Zealand?

No. It is not legally required. ACC covers personal injuries, not vehicles or property, so an at-fault driver is personally liable for the damage they cause to someone else's car or property. That liability is the real reason to hold at least third party cover.

Do I need separate earthquake insurance?

No, and you cannot buy it separately from the Commission. Cover is automatic if your home policy includes fire insurance, which most do. What you control is your sum insured, because that determines how much sits above the cap.

What is the maximum Natural Hazards Insurance levy?

The levy is 16 cents per $100 of cover, and the maximum is $480 plus GST a year — about $552 including GST. It is collected through your insurer's premium. Treasury has recommended raising the rate, but that review is paused, so the rate is unchanged for now.

Is it cheaper to buy direct than through a broker?

Usually yes on simple, standard risks like a single car or a standard house, because there is no commission or fee inside the price. A broker earns their place on complex or unusual risks, commercial cover, and when a claim turns difficult and needs arguing.

What should I check before switching insurers?

Compare the definitions and exclusions, not just the premium. Check the excess, whether glass is included, how agreed value versus market value is handled, and whether the new policy carries over your claim-free years. A cheaper premium with a narrower definition is not a saving.

What Matters Most

Tower is a reasonable choice for a standard New Zealand household: a car, a house, some contents, nothing exotic. The pricing model rewards low-risk customers, the digital process is genuinely quick, and the product wording is in line with the market.

But the insurer is not the decision that matters most. Your sum insured is. The Commission pays first and only up to $300,000 plus GST, and your own policy has to carry everything above that. Insure the rebuild for less than it costs and no brand, discount or app will save you at claim time.

Get that number right, then let price decide between insurers.