With desperation sinking in for some flood-damaged property owners, Insurance Council of NZ – Te Kāhui Inihua o Aotearoa (ICNZ) chief executive Tim Grafton has issued a “buyer beware” warning for those willing to buy properties without a code of compliance certificate.
Some property owners have begun to sell their houses even before repairs are completed and categories handed out. This rush sale paints a problematic picture, according to Grafton, as there is no certainty in insuring properties without a code of compliance certificate.
“That presents a real challenge for an insurer to be satisfied about the risks that are there, it is a 'buyer beware' situation,” Grafton said in a report from the RNZ.
He added that if the property is being rented, there should be no issue in getting contents insurance if the repairs have been finished. However, if the property has been categorised as high risk and the buyer finds out later, then insurance companies would need to take this into account, possibly raising the prices.
Grafton also stressed the fact that existing claims from the previous homeowner with their insurer would need to be passed onto the buyer.
“Don't assume that as a right, you are now the owner of that insurance policy; it is only with the permission of the insurer that claim can be assigned and then not all the rights will transfer through,” he said.
Recently, Consumer NZ revealed the five most common reasons for making a travel insurance claim, as per figures from the ICNZ.
What are your thoughts on this story? Please feel free to share your comments below.
