18/06/2026
🚨 Property purchasers - This is why an Insurance Condition matters when purchasing property...
As climate-related risks such as flooding, erosion and landslips increase across New Zealand, insurance has become a critical, and easily overlooked, issue in property transactions. Insurers are now beginning to use climate modelling to assess risk at an individual property level, leading to higher premiums or, in some cases, refusal to insure altogether.
Many buyers sign sale and purchase agreements conditional on finance and a building report, but no insurance condition. When an issue with insurance arises, it is often discovered too late. If a property cannot be insured, a bank is unlikely to lend, however, the buyer may still be legally required to settle. Where insurance is available, rising premiums can sometimes make ownership unaffordable, particularly for first-home buyers.
Including an insurance condition in your offer is now just as important as finance, LIM, and building report conditions. It allows buyers to confirm that cover is available on acceptable terms before committing to the purchase. In today’s market, it is no longer a secondary consideration and helps to safeguard buyers from financial and legal risk.
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