Tower insurance has brought back full cover for homes destroyed by fire.
Chief executive David Hancock said the previous policy of sum insured home insurance was confusing policy holders.
Their homes will now be fully replaced to the same standard as before the fire.
Mr Hancock said while policy holders would not have to pay more for the new feature, it would cost the company.
Tower will discuss reinsurance costs at its next results meeting in a few weeks.
Mr Hancock said the policy change came after lengthy conversations with the company's reinsures and clients.
He said Tower was leading the way in New Zealand, and was the only major provider of cover to bring back full insurance for homes destroyed by fire
Mr Hancock was not sure what Tower's competition will do.