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What are Your Rights When Buying Insurance in NZ?

Consumer protection is a right. When it comes to insurance, you have the right to know the details of your policy. Ask questions if you find any aspect of your policy to be confusing. Knowing the ins and outs of your insurance policy will help you get the most from your insurance coverage.

How are Your Rights Protected?

The government has established legislation to ensure consumers’ rights are protected and that there are clear guidelines for insurance companies to follow. Insurance watchdogs have been created to help protect the consumer interests. To ensure fair practices, the Fair Insurance Code was created to serve as the basis for professional and ethical conduct in insurance and banking transactions.

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The Fair Insurance Code

The Fair Insurance Code is a code of practice that all member insurance companies of the insurance council have agreed to. The code stipulates minimum standards for insurance companies, outlines the policyholder’s responsibilities toward the insurance company and the insurance company’s responsibilities to the policyholder. The code is followed closely by the Insurance and Savings Ombudsman.

Responsibilities of the Insurance Provider to You

Insurance providers are obligated to disclose and explain all the information pertaining to your insurance policy. Other responsibilities include:

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  • Explain benefits of particular insurance policies and help to determine which policy is best suited for your current needs
  • Explain reasons for required information
  • Outline what is and isn’t insured to give a clear understanding of the policy
  • Provide your insurance broker with a copy of the policy
  • Provide you with a copy of all the information given to them
  • Provide you with updates on your insurance policy
  • Provide assistance with insurance claims
  • Pay all valid insurance claims immediately
  • Update you on the progress of your insurance claim
  • Explain why an insurance claim is declined
  • Ensure that all your information is held confidential at all times


Your Responsibilities to the Insurance Provider

To ensure a good working relationship with your insurance provider, you should meet the following responsibilities:

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  • Provide complete and honest information when applying for insurance, renewing an insurance policy and making an insurance claim. This includes any changes in your financial position.
  • Report criminal convictions or traffic violations.
  • Provide information of previous insurance claims.
  • Do not withhold information, including denial of coverage by other insurance companies.
  • Changes or modifications made to your vehicle, if you are insuring a car.
  • Change of drivers using your vehicle.
  • Provide information on bankruptcy.


These are a few samples of the information you should share with your insurance provider to prevent future problems. As a consumer, always ask for explanations when there are issues you cannot understand. Your provider should be able to explain terms and issues to you in a way that you can easily understand.

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Insurance Complaint Procedures

Follow this procedure to formalise a complaint:
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  • Let an independent party investigate your complaint.
  • Notify your insurance provider in writing about the complaint and include the name and contact details of the person conducting the investigation.
  • The insurance provider will generally let you know within three working days that they have received your letter. Within 10 days of the complaint, a progress report will be sent to you.


Insurance and Savings Ombudsman’s Office (ISO)

The Insurance and Savings Ombudsman settles disputes within the insurance and banking industries. Services are free to settle either business or personal insurance claims. The decisions of the Insurance and Saving Ombudsman are based on the Fair Insurance Code.

Member insurance companies are bound to the decision of the Insurance and Savings Ombudsman whether it is in their favor or not. On the other hand, if you are not satisfied with the decision of the Insurance and Savings Ombudsman, you can always take your complaint to the court system. Keep in mind that it can be a costly and a drawn out process, taxing both your time and resources.

Administration of the Fair Insurance Code

The Insurance Council of New Zealand takes responsibility for the Fair Insurance Code. The Fair Insurance Code is reviewed every three years by the Insurance Council, insurance companies and banking institutions.

Breaches of the Fair Insurance Code

If you feel that your insurance company has breached the Fair Insurance Code, report the matter to the Insurance Council. The Insurance Council will investigate the issue with the insurance company and take the appropriate action.

Claims Paying Rating

Insurance companies, which are members of the Insurance Council, should have a claims paying rating from an approved rating agency. This assures consumers of the capability of the insurance agency to pay future claims. The insurance company should be transparent about their rates when you apply for insurance or renew your policy.

NZ Insurance Legislation

For future reference, below is a list of laws, acts and legislations that govern and/or affect the NZ insurance industry:

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  • Insurance Companies (Ratings and Inspection) Act 1994
  • Insurance Companies Deposits Act 1953
  • Insurance Law Reform Act 1977
  • Insurance Law Reform Act 1985


Legislation for consumer protection includes:

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  • Fair Trading Act 1986
  • Consumer Guarantes Act 1993
  • Human Rights Act 1993
  • Privacy Act 1993
  • Disputes Tribunals Act 1998


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