Southerners yesterday reported "shocking" insurance price hikes driven by the increased cost of building and increasing extreme weather events.
Data provided to The Treasury and government ministers and released to RNZ under the Official Information Act showed that in Otago, the average cheapest premium in September 2022 of $1265 increased to $1693 in July last year.
An Otago pensioner who contacted the Otago Daily Times yesterday said he faced a nearly 50% increase in his annual payments this year.
Fears of "insurance retreat" continue to trouble at-risk areas.
Insurance council chief executive Tim Grafton said extreme weather events in New Zealand in the last few years had brought the issue of "resilience" into focus.
"As a country we need to address how we deal with developments in areas where there may be a high risk from natural hazards such as flooding."
The government’s proposed national policy statement on natural hazard decision-making could require councils to evaluate the likelihood of a hazard such as floods, earthquakes, or landslips, when making planning decisions in a given area, he said.
The Ministry for the Environment discussion document published in September last year said councils had called on the government for more "defined and stringent provisions" to allow them to decline resource consents in high-risk areas if appropriate.
It also said the insurance industry had called on central government to block development on flood-prone land, with the company IAG specifically requesting a national policy statement to stop development in flood-prone locations.
Asked by the ODT yesterday about predictions for premium increases related to sea-level rise over coming decades, Mr Grafton said each insurance company would look at a property on a case-by-case basis "and even with the same information, they will take different positions depending on their own appetite for risk".
Insurers made decisions based on a range of information, including information from councils along with hazard modelling, data on past events and what had been done to reduce risks.
"The focus needs to be on building resilient communities," he said.
"We are working together with central government, councils, and others about future insurability around known hazards and risk reduction, with the aim to find solutions to reduce the risks from the impact of extreme weather events that will help protect lives and property."
Retired physics teacher Doug Bell, of Oamaru, said he believed a lack of competition among insurance companies led to his "eye-watering" premium increases.
After significant year-on-year increases, his insurance went up by 48% this year compared to last.
He believed insurance companies were desperate for revenue after big payouts following the disastrous weather events in Auckland and the East Coast of the North Island.
His Warren St, Oamaru home, only three blocks from the sea, was 50m above sea level and not susceptible to sea level rise, or flooding.
But to get his premiums under control, he increased his excess and lowered the value of his house replacement, he said.
Despite the concerns of a developer about the future insurability of properties in Dunedin’s coastal flood zone, reported in the ODT last week, yesterday another Dunedin developer said it could be done right.
Blue Sky Property director Lyndon Fairbairn said he took a cautious, site-by-site approach in Dunedin’s coastal hazard zone.
The company was "quite selective" about the sites it chose to develop.
"While a flood zone is kind of a blunt instrument banged on a lot of area in Dunedin, actually we find there’s some really good parts to develop and there’s parts we probably wouldn’t be developing.
"And when we do go to develop, we do a lot of due diligence."
