New Zealand homeowners tackle soaring insurance costs – report
New Zealand homeowners tackle soaring insurance costs – report | Insurance Business New Zealand
Insurance News
New Zealand homeowners tackle soaring insurance costs – report
Climate concerns deemed one of key factors influencing costs
Insurance News
By
Roxanne Libatique
New Zealand homeowners are adopting strategies such as under-insuring their properties, increasing their deductibles, and utilising their savings to counteract steep rises in insurance premiums. Coverage from RNZ has unveiled that securing comprehensive insurance is becoming a tougher task for many.
Data submitted to the Treasury highlighted an average increase in premiums of 23% from September 2022 to July 2023, with spikes reaching over 30% in certain locales. Furthermore, it was found that automatic online coverage by some primary insurers is not being offered for properties located in areas at high risk of earthquakes and floods, especially noted in Wellington and Marlborough regions.
How do New Zealand homeowners face rising insurance premiums?
While the Treasury has yet to release its newest data from January, individuals from various parts of New Zealand have shared their stories with RNZ, expressing astonishment over premium increases that, for some, amounted to thousands of dollars. This led many to decrease their insurance coverage, leaving them vulnerable in the event of significant property damage.
For instance, Julie Harris from Waikanae Beach on the Kāpiti Coast recounted her surprise upon learning her insurance premium was set to increase from $4,000 to $6,300 annually, marking a 58% rise. This increase was significantly influenced by the natural disaster component of their premium.
“I looked at it, and I tried to figure out how the numbers could be so big,” Harris said, as reported by RNZ. “We’ve had no indication from our insurers or the council that we’re at greater risk now, sitting where we are, than we were a year ago, 10 years ago.
“If we had increases like this in the next few years, we’d have to reconsider living here – not because we think we’re in danger of anything, just because maybe a smaller place in a different area would have less insurance cost, perhaps.”
Conversely, Charlie, a single parent from Lower Hutt, faced a 35% increase in her insurance premium, a scenario for which she was unprepared despite last year’s significant rise.
“Nothing could have prepared for the fact that [this year] it was actually a 35% increase,” she said, as reported by RNZ. “It was a really unpleasant shock.”
“Homeowners may now find it more difficult to arrange house cover in order to settle on a newly purchased property, even if it wasn’t affected by last year’s weather events, as insurers are now more sensitive to possible natural hazard risks,” said IBANZ CEO Mel Gorham. “Insurance brokers can often help homeowners in these circumstances as they have good local knowledge, expert understanding of the insurance market, and access to policy options that individual homeowners can’t purchase directly.”
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