A quantity surveying company says changes to home insurance policies are leaving many homeowners underinsured by between 25% - 50%.
In July most house insurance policies changed from unlimited full replacement, to a maximum sum insured.
Construction Cost Consultants says its research indicates about 90% of homeowners could be underinsured.
Managing director Gary Caulfield said many people he has dealt have accepted the lower insurance sum, the default provided by banks and insurers which is at least 25% short of the actual rebuild cost.
But he said, it can be up to 50% less when more complex features, such as retaining walls are included.
The Insurance Council rejects the claim, calling it scaremongering.