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Insurance claims come flooding in

The Wellington region, including Wairarapa, has made a record number of land-related insurance claims.

National Institute for Water and Atmospheric Research has predicted that areas of Wairarapa will become more vulnerable to flooding and extreme weather as climate continues to warm.

The Toka TU Ake Earthquake Commission [EQC] said the record number of insurance claims for land damage this year was a reminder to homeowners to check their insurance coverage and understand how to reduce the impact of local natural hazards.

It said it received nearly 3300 claims in the past year for damage caused by landslips, storms, and floods across New Zealand.

It said 80 per cent of all 4209 insurance claims received in the year to December 1, were weather-driven.

“This was more than double the number of land claims from these events in the previous four years.”

EQC said Wellington and Wairarapa landslips resulted in 829 claims, and a further 90 were for storm and flood damage.

Wellington City had the highest number of EQC claims in New Zealand, totalling 690 land and building claims, with 588 of them being from landslips, storms, and floods.

The EQC did not provide a separate number for Wairarapa.

“The stormy winter of 2022 was disruptive and often devastating for communities across the country and resulted in record numbers of land claims,” EQC chief readiness officer Kate Tod said.

“Notably, there was a huge increase in landslip claims, and these are usually complex and costly to fix.”

As climate change caused more severe weather, most insurance companies questioned by the Times-Age said they would continue providing cover to homeowners.

An AA Insurance spokesperson said the company was widely available to customers across New Zealand.

“Some locations will be more expensive to insure than others, but we have not declared any areas as being uninsurable.”

They said it was likely that eventually there would be areas of New Zealand where insurers simply would not be able to take on the risk, so a continued focus on climate adaptation and risk mitigation was critical.

“An important conversation is taking place between communities, the insurance industry, the private sector and local and central government regarding steps we can take as a country to appropriately adapt to the impacts of climate change, including decisions over future developments and where they should be allowed.”

They said the insurance sector had a role to play in responding to the threats of climate change and adapting accordingly.

They said New Zealand was already experiencing the effects of climate change on weather events in New Zealand and overseas.

They said AA expected to see the cost of claims continue to increase.

Tower Insurance chief underwriting officer Ron Mudalia said the company’s approach to insuring homes in light of climate change was specific to individual addresses, as opposed to large areas or regions.

“For example, our flood-risk tool is so detailed that neighbouring addresses can have completely different risk ratings.”

Mudalia said while the company continued to insure all areas of New Zealand, there were some individual addresses in high flood-risk locations that Tower needed to undertake an additional review before offering cover.

Chief executive of AMI, State and NZI Amanda Whiting said insurance premiums would increase in areas with hazards, but the companies would not be retreating.

“Insurance is only one component of the solution, and we also know there is much more that needs to be done to keep New Zealanders safe from the impacts of flooding.”

Insurance broker Aon declined to comment.

The Insurance Council of New Zealand [ICNZ] said it wasn’t aware of any insurers pulling out of any towns.

When asked if Wairarapa residents, particularly those living in flood-prone areas, could expect their homes to no longer be insurable within the next 50 years, it said this outcome was possible.

“If nothing changes to reduce the risks posed by climate change, then there is the potential for this to happen.

“But if you think of the circumstances where this might occur, a lack of access to insurance might be low down on the risk of concerns.”

The council said when hazards became high, communities would likely be looking at risk to life, plus the cost of running Civil Defence responses such as sandbagging, evacuations, and the operation of welfare centres first.

It said there were too many examples of people having to deal with repeated instances of evacuations followed by having to clear up after sewage-contaminated flood waters had been through their homes.

The council said in some cases it could be sensible to plan for managed retreat, sooner rather than later so that communities could move before the risks to their safety became intolerable.

Grace Prior
Grace Prior
Grace Prior is a senior reporter at the Wairarapa Times-Age with a keen interest in environmental issues. Grace is the paper’s health reporter and regularly covers the rural sector, weather, Greater Wellington Regional Council, and coastal stories.

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