In the wake of a series of major storm events that hit NZ this year, would-be home buyers are being urged to check the insurability of properties before they finally make their purchase.
While one-off floods do not typically impact the insurability of properties, this is not the case with multiple events which often lead to non-coverage or higher excess levels.
Tim Grafton, chief executive of the Insurance Council of New Zealand (
ICNZ), has urged would-be home buyers to consider the natural hazards properties face before they make their purchase, as it could make insurance cover pricier or more difficult to get,
New Zealand Herald reported.
Due to the high risk of floods, Grafton said some properties in Kaeo in Northland were not covered for floods, while a group of houses in Christchurch’s Flockton Basin faced an excess of $10,000 per flood before the council undertook a $48 million flood mitigation programme. Also difficult to insure are parts of Thames and the Coromandel.
Aside from floods, Kiwis also have to contend with rising sea levels and coastal erosion, the report said.
One area suffering from coastal erosion problems, said Grafton, was the small coastal town of Haumoana, which, according to Wikipedia, has a shoreline that is retreating at an average of 0.3m and 0.07m per year.
“If you are buying a property you would be nuts to put in a binding offer without checking you can insure it,” Grafton told
NZ Herald.
The ICNZ boss said people who could not get insurance for a property would also struggle to get a mortgage.
“If you can’t get insurance the bank won’t loan you the money,” he pointed out.
Grafton also advised those considering paying top dollar for prime coastal properties to consider erosion and rising sea level issues, which could impact the properties in the future.
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