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You are right that you can get away with it in NZ.

For total loss then bankruptcy might save you money (assuming you have no other assets or kiwisaver; since you still owe the debt).

But part of the contract with the bank is allowing the bank and insurance company to verify/update.

If you cancel your insurance, the insurance company is incentivised to tell the bank since you will probably sign up for insurance again when told to by the bank. I don't believe the banks or insurance have push updates. I would guess banks batch check if insurance is still live annually?

I live in Christchurch and I believe insurance is valuable risk management - plenty of people gambled and lost with Earthquakes. That said: I own an as-is house because I bought a 3 bedroom on 800m2 for $190000 (cheap because you can't get a mortgage for it because it is uninsurable due to subsidence - I only paid land price).

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bell-cot 18 hours ago | parent [-]

(For those unfamiliar - $190000 New Zealand is roughly $106,000 US, and 800m2 is about 1/5 acre. I know neither Christchurch real estate nor its geology - but obviously that 1/5 acre carries a big "will it keep subsiding?" caveat.)

	▲	robocat 3 hours ago \| parent [-]
		I can highly recommend buying property after a big earthquake - there's amazing bargains (lifetime wealth changing). I'm guessing more risky to buy after other disasters like fires or hurricanes or floods. My land is not too bad actually (relatively) - heaps of other insured properties have similar slumping along the river or on the hills. I've got friends with slumping issues - hidden nightmares for future buyers... In their houses you could feel the uneven floors before the earthquake and the earthquake just accelerated the problem. Pay attention when buying any house in an earthquake zone!!! My house is actually fine -- only the ring foundation is broken and needs replacing. There are plenty of companies with the skills to do it reasonably, because it is a common issue in Christchurch e.g. a raft foundation. The property was extremely cheap (less than half price) partly due to another issue - the driveway and front lawn gets flooded by the river occasionally (the house is high and dry). Disclaimer: I like risk and can afford it.