New Zealand’s financial dispute resolution services are raising their maximum compensation limits to $NZ500,000 ($450,760) and increasing the cap for non-financial losses. 

The change lifts the Insurance & Financial Services Ombudsman Scheme cap from $NZ350,000 ($315,534) plus GST, and doubles the maximum non-financial loss compensation to $NZ10,000 ($9015). 

The insurance ombudsman, the Banking Ombudsman Scheme, Financial Services Complaints and the Financial Dispute Resolution Service will have the same maximums to provide consistency. The higher limits take effect on Thursday. 

The services say the changes represent a significant step in ensuring more consumers have access to free and fair dispute resolution. 

Regulations to enforce the changes were made in March after a government decision in October 2022.  

A cabinet briefing paper from then noted previous limits were too low given the value of some financial products. 

March 2022 data showed the average mortgage for all borrower types in New Zealand was $NZ401,000 ($361,512) and the average for first homebuyers was $NZ586,000 ($528,294). The value of life insurance products was also typically higher than scheme caps, averaging $NZ566,000 ($510,263).