What if my house is underinsured after a fire?

Underinsurance can be a serious issue, and it depends on the type of policy. Many New Zealand home insurance policies are either sum insured, where the insurer pays up to the amount stated, or replacement cover, where the insurer pays the reasonable cost to rebuild the property, subject to the policy conditions. Check your policy schedule and wording to see which you have. If you had a sum insured policy, the insurer may not need to pay more than that amount, but you may argue that the insurer gave inadequate advice or a misleading calculator or that you relied on their estimate. Ask for the insurer's records of how the sum insured was set. If the insurer or adviser misled you or did not take reasonable care, you could complain to the dispute resolution scheme.