What does sum insured mean?

When you take out a new house insurance policy you’ll need to specify the amount it would cost to fully rebuild your house. This is called the sum insured, and it’s the maximum your insurance company will pay out if your home is destroyed. It's your responsibility to ensure this figure is enough to rebuild your home in case of a total loss and to keep this figure up-to-date.

If you have insured your house through Kiwibank, your house insurance cover is provided by Tower Insurance Limited.

How it works

If you’re applying for house insurance you’ll need to specify a sum insured amount when you apply for your insurance.

Calculating your sum insured

Your sum insured is not the same as your house’s market value. It’s the likely cost of replacing your home on its current site, based on its current:

  • size
  • standard and type of construction
  • structures, like decks, driveways, sheds, garages, retaining walls, fencing and outbuildings
  • period features (typically in villas and bungalows)
  • special features like permanent swimming and spa pools.
  • This amount needs to include everything it would cost to rebuild your home, including:
  • building material and labour costs
  • demolition and removal of debris
  • site preparation
  • professional fees
  • compliance costs.

To set your sum insured, you can either:

  • get a licensed builder, quantity surveyor, or architect to provide an estimate of what it could cost to rebuild your home
  • ask a registered valuer to value your home for insurance rebuild purposes
  • use the independent Cordell Sum Sure calculator below, as a guide.

Cordell Sum Sure calculator

The Cordell Sum Sure calculator is an independent tool that generates an estimate of your likely rebuild cost based on the information you provide about your house. It may not be as accurate as a valuation done by a professional.

To complete the calculator, just enter your address and check the property details list. The calculator will do the work for you.

While the calculator can be useful it does have limitations that you should be aware of. It may not be accurate for very large or high value homes, such as those that cost over $2 million to rebuild, and does not factor in many special features including:

  • areas of shared ownership, such as driveways and fencing that you co–own with neighbours
  • hard to access sections
  • houses with multiple construction materials (e.g. brick and weatherboard)
  • houses with mixed commercial and residential use.

If your home has any of these features you might want to consider getting a professional valuation to ensure you’re adequately covered. If you don’t, you’ll need to add an additional amount to your estimated sum insured to take these features into account.

Remember to save a copy of your results for your own records.

Use the calculator

The Cordell Online Calculator provides factual information as to the estimated rebuild cost of your home, based on publicly available data about your house. This calculator provides an estimate only based on industry average building replacement costs and the true replacement cost of your home will vary depending on your circumstances. It does not constitute a recommendation or opinion in relation to taking out or replacing an insurance policy. It is not personalised financial advice. It does not take into account your particular financial situation or goals. The calculator is provided by Cordell Information Pty Ltd and licensed for use on this website. Whilst effort has been made to ensure that the information is accurate, Tower Insurance Limited and its Partners accept no responsibility for the accuracy of any information in, or results derived from, or any reliance you place on, the calculator.

For the avoidance of doubt, Kiwibank Limited accepts no responsibility for the accuracy of any information in, or results derived from, or any reliance you place on, the calculato

Shared ownership

If you share a driveway or fences with your neighbours, you’ll need to decide what you’ll each insure and for how much.

If you live somewhere governed by a body corporate, like an apartment complex, the body corporate usually has one insurance policy covering all the units in the complex, and all the common property. This may already be insured on a sum insured basis – you can find out from your body corporate secretary or committee.

You’ll need to understand the extent of your liability and allow for it in your sum insured.

Keeping your sum insured up to date

Once you’ve set your sum insured, it’ll be adjusted automatically by Tower before they renew your policy each year. To do this Tower will either use the Cordell Sum Sure calculator, or use the building components of the Consumer Price Index.

The new sum insured amount will be included in your renewal documents, which will be sent to you a few weeks before your policy renews. You need to review the sum insured each year to make sure it’s still appropriate for your home. The Cordell Sum Sure calculator can help you with this.

Call one of our insurance experts on 0800 222 491

House, Contents and Vehicle Insurance are provided by Tower Insurance Limited, and Tower Insurance Limited is solely responsible for any claims under the policy. Kiwibank Limited (including its related companies) does not guarantee the obligations of, or any products provided by, Tower Insurance Limited or its related companies. Kiwibank Limited may receive a commission on any policy it arranges.

Important terms, conditions and exclusions are set out in the House, Contents and Vehicle Insurance Policy wording (PDF 653.5 KB). Effective from 6 December 2016. If your policy was issued before this date, the wording in your policy may differ. Please contact us for a copy of the policy that applies to you.

“We”, “us”, or “our” means Tower Insurance Limited.

Tower Insurance Limited has a financial strength rating of A- (Excellent) as at 16 August 2017 from A.M. Best Company.

Rating Scale


A++, A+ Superior

A, A- Excellent

B++, B+ Good


B, B- Fair

C++, C+ Marginal

C, C- Weak

D Poor

E Under Supervision

F In Liquidation

S Suspended