If you think your guitar is safe in your flat until your cat knocks it over and smashes it, think again: your homeowners insurance could swoop in for the rescue—if you picked the right coverage. Most people think of home insurance as just something you need to check off so you can get a mortgage. But what you put on that policy actually matters—a ton. One missing bit of cover, and you’re stuck replacing everything yourself (and trust me, that hurts more than stepping on a Lego at 3 a.m.).

Dwelling Coverage: Protecting Your Actual House

Let’s start with the basics. Dwelling coverage is the part of homeowners insurance that pays to rebuild or repair your actual house if something bad happens—think fire, severe storms, or if a tree decides to take a nap on your roof. It’s not just about four walls and a roof, though. It usually covers built-in appliances, cabinets, floors, walls, and two things most people forget: attached garages and decks. If you ever glance at your policy (rare, I know), you’ll see the word “replacement cost.” That’s the price to rebuild your place from scratch as if it never happened, not what you paid for it years ago, and not what you could sell it for today. It’s worth checking your policy’s numbers, especially after you renovate or if local building costs have shot up. Construction costs in Auckland, for example, have risen by more than 10% in just the last three years. Plenty of people are underinsured without even realizing it.

Dwelling coverage doesn’t cover everything. Floods? Nope. That’s a separate policy. Earthquakes? Again, you need a dedicated rider or policy there. If you’re in a flat or townhouse, check who’s on the hook for repairs to shared walls or foundations—you might be less covered than you think. Want a tip? Take photos or video of every room once a year and save them online. If your worst day hits, you don’t want to be hunting for receipts or trying to convince an insurer you really did have that $3,000 oven.

One of the little-known facts is that damage from things like burst pipes due to sudden freezing is usually covered—not just from weather, but faulty plumbing. But insurers will expect you to do your bit to keep the house in shape. If you ignore a leaking pipe for a year before it bursts, don’t be surprised if they say “nah, that’s on you.”

One thing people always miss: your insurance agent won’t automatically update your coverage after a big reno. If you add that extra room or a fancy deck and forget to increase your coverage, the insurer will cover only up to the old amount—not the new, improved value. It’s on you to tell them.

Personal Property Coverage: Protecting Your Stuff

Ever lose sleep wondering what would happen if everything you owned went up in smoke? Personal property coverage is the bit that replaces or repairs your things—not the actual house—after a disaster, up to your policy’s limit. Imagine losing every stitch of clothing, your phone, TV, couch, laptop, or kitchen gear. Not many people could buy all of that out-of-pocket. Most policies start coverage at about 50% to 70% of your total dwelling coverage. So if you insure your home for $600,000, your personal things might be covered up to $300,000 or $420,000. Still, there are sub-limits for high-dollar stuff—your wedding ring or that rare signed rugby jersey? Check what your maximum payout is on jewelry, electronics, or artwork. If it’s too low, get a scheduled personal property rider.

Here’s a quirky thing: your stuff is often covered even when it’s not at home. So, if someone swipes your bike from outside a café or nicks your phone from your work desk, your home insurance might kick in (after the deductible, of course). This is perfect for anyone always lugging their gear around Auckland, hopping between Wi-Fi spots chasing that perfect flat white.

But there’s a catch. Most policies pay out on “actual cash value” unless you pay extra for “replacement cost.” Actual cash value means they deduct for wear and tear—so that three-year-old laptop you loved? The payout won’t buy you a brand new one. Replacement cost bumps that up to what it costs today for a new one. Always ask about this when you buy or renew. Insurers love making the paperwork confusing, so don’t leave it to chance.

Records help. Not just receipts—keep a list (or video) of valuables, ideally with make, model, and serial numbers if possible. I once watched a friend spend weeks arguing with an insurer about the price of old comic books after a break-in. Trust me, a simple spreadsheet saves you massive headaches later.

Oh, and read the fine print. Stuff like cash, collectibles, and precious metals often come with tiny limits. If you stash gold coins or have a rare collectibles collection, be ready to top up your coverage. Here’s what a typical policy looks like for sub-limit payouts:

Think about updating your list every year. Everyone forgets new gadgets and gear they picked up, but they add up quickly.

Liability Protection: Guarding You Against Lawsuits

This is the wild card nobody talks about—until it saves your bacon. Liability coverage deals with legal claims against you if someone’s injured on your property or if you accidentally damage someone else’s stuff. Picture this: your neighbour finally visits, slips on your icy steps, and breaks an ankle. Or Tiberius (my cat, who has all the grace of a bowling ball) bolts outside and scratches a visitor. If they sue, liability coverage pays legal bills and any damages you’re ordered to pay, up to your policy’s limits.

Standard limits start around $100,000 but many experts in New Zealand recommend at least $300,000 these days. Medical bills pile up quickly, especially if you’re found at fault or get caught up in a bizarre lawsuit. And yes, this even covers you away from home. So if you’re at a mate’s and accidentally spill red wine on their $10,000 Persian rug, your home insurance could have your back.

Even stranger: this includes things you never thought about, like paying for a lawyer to defend you, settlements, and sometimes lost wages if you have to take time off work for a court date. But it doesn’t cover everything—intentional acts or liability from running a business at home might get kicked back. If you’re moonlighting or run a home-based online shop, talk to your insurer about extra business coverage.

Some policies offer “medical payments to others” (different from your liability coverage). This can pay small amounts—usually up to $5,000 per person—if someone is hurt at your place, no lawsuit needed.

Raising your liability limit barely changes your premium, but it can change your life if the worst happens. And if you’ve got a dog (especially one listed as a “risky breed”), a trampoline, or a swimming pool, you should absolutely max out this section. Some insurers might even require extra precautions (like fenced-in pools). Don’t be surprised if they send an inspector round.

Disputes involving family members? Not gonna help you. Most policies exclude injuries to anyone who lives in your home. Want umbrella coverage beyond your standard liability limit for true peace of mind? It’s not as expensive as people think and worth considering if you host lots of guests or have a high net worth.

Additional Living Expenses: Where Will You Stay?

Let’s say your kitchen catches fire, and you’re suddenly living at a hotel for weeks while tradies (contractors) rebuild. Not many can afford months of double housing costs. This is where Additional Living Expenses (ALE), sometimes called loss of use coverage, swoops in. It covers stuff like hotel stays, extra food costs (eating out due to lack of kitchen), temporary rentals, storage, and even laundry. Most Auckland policies cover 20% to 30% of your dwelling limit for these extra costs.

Pick up the fine print, though: ALE only kicks in if the loss is due to a covered event, and only the “above and beyond” costs count. If you usually feed your family for $150 a week at home but drop $500 eating out while in a poky motel, the delta gets covered. Save those receipts! Many people underestimate how expensive it gets living out of a suitcase.

This coverage is automatic in most policies, but not everywhere. If you’re renting out part of your house (say, with Airbnb), coverage for your tenants’ costs isn’t included—both sides need their own plans. And if you bounce between friends or family, you may need written documentation for reimbursement. It’s always a good idea to call your insurer’s claims team as soon as you’re displaced—they’ll clarify what’s included before mystery bills stack up.

Check your limits: If you live in a high-cost spot or your home is huge, your standard ALE coverage could run out before your repairs are done. Ask your insurer about bumping up the limit if needed. And don’t expect help if it’s just a power outage or a pre-planned remodel. The loss of access must be tied to a covered event.

A practical tip most people never hear: print a copy of your policy’s summary and keep it somewhere besides your home. When panic hits, you won’t want to dig through online logins or insurance lingo during the chaos. And if you’re ever forced out, knowing your rights helps you stand your ground with insurers who—let’s be real—might prefer not paying.

If you’ve got pets (like me and my invincible tabby, Tiberius), double-check how ALE applies. Some policies help cover the cost of boarding your pet—lifesaver if your only other option is couch-surfing at a mate’s place who’s allergic to cats!