House insurance has ballooned by as much as 300% in a decade. This is a cost homeowners are struggling with, according to a Fairfax article.
Methamphetamine contamination, natural disasters and hikes in government levies have all caused insurance companies to hike rates on tenanted properties.
The Insurance Council of New Zealand said it was unaware of an increase in non-insurance, but many homeowners struggling to pay for house insurance are opting to under-insure.
“We want to see insurance available and affordable for people, so that is a concern,” ICNZ chief executive Tim Grafton told Fairfax.
According to the report, the understanding of the risks properties faced, particularly around earthquakes, had increased significantly in the past decades. In 2012-2013, the cost of insuring a home increased dramatically as reinsurers realized they had to charge NZ insurers more because of the losses from Canterbury quakes.
In Wellington, Kaikoura and Christchurch, property owners pay more because of the heightened earthquake risk.
NZBrokers collective chief executive Jo Mason told Fairfax consumers would be hit hard by another price hike. She said government and insurance representatives could work together to spread the burden.
“Why can't they devise a way so that it goes up incrementally every year, rather than absolutely slapping people at a time when they're struggling to get into a house?” she said.
Related stories:
Homeowners urged to check earthquake vulnerabilities
Insured homeowners to face double blow from levy hikes
