His application to increase his insurance was declined by the insurer with the following explanation:
In the past insurance companies have generally worked out the insurance premiums based on the quality and size of someones home. In reality this meant that some areas in New Zealand were subsiding other more risky areas (such as Hamilton being a low risk area and Wellington being a high risk area - yet premiums were quoted in the same way).
With this model, in recent times insurance companies that provide nationwide cover to their clients have suffered. This is due to an insurance company who may only insure properties in say, Hamilton (and not having the risk of insuring Wellington or Christchurch properties) being able to provide cheaper premiums.
As a result nationwide insurance companies are now looking at region by region when providing insurance quotes. This way they can remain competitive when quoting premiums in areas such as Auckland or Hamilton. The downside is that areas such as Wellington have seen large increases in their premiums.