Home insurance: Do you live in an area at high risk of natural disasters?

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#2124754 13-Nov-2018 14:27

Senecio:

All insurance is risk based. People in a higher risk category pay a higher premium.

- Car Insurance. A car garaged in Ponsonby will have a different premium to one parked on the road in South Auckland

- Health Insurance. A person with a known history of a family genetic disorder will pay a higher premium than others

- Travel Insurance. Someone who plans to skydive or off piste ski will pay a higher premium

I don't understand why you're objecting to the same principles being applied to housing insurance?

earthquakes and other disasters affect large numbers. If lots of home owners and businesses are under insurred then the impact on the countries economy and wealth is greater. Speading the risk means more are adequately insured making recovery faster and lessens the economic impact.

frednz

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#2124756 13-Nov-2018 14:27

Senecio:

All insurance is risk based. People in a higher risk category pay a higher premium.

- Car Insurance. A car garaged in Ponsonby will have a different premium to one parked on the road in South Auckland

- Health Insurance. A person with a known history of a family genetic disorder will pay a higher premium than others

- Travel Insurance. Someone who plans to skydive or off piste ski will pay a higher premium

I don't understand why you're objecting to the same principles being applied to housing insurance?

I don't think home insurance is as "black and white" as say, car insurance. If we could predict with absolute accuracy which areas of NZ are going to suffer future expensive natural disasters and when these are going to take place, then there might be some justification in charging people in these "high risk" areas more for home insurance.

But, as has been pointed out, the whole of NZ is prone to natural disasters in one way or another, so it's more equitable to share the cost of these equally, rather than charge some people more than others for home insurance based on where they live.

Wheelbarrow01

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#2124757 13-Nov-2018 14:28

JamesN:

Wellington, Kaikoura & Christchurch are classed high risk due to Earthquakes.

The major insurance companies are still not taking on new home insurance in the mentioned areas if the property is currently insured by another insurer.

This is due to insurance companies current capacity they have with there own re insurers, its the insurance version of Telcos buying a certain amount of capacity from the wholesalers.

From my understanding, Tower started doing the premiums like this earlier this year (I could be wrong though)

The low hazard areas are subsiding the high risk areas but now they are going the route, if you voluntarily live in a high risk natural disaster area then you pay for it,

Are you sure? I recently received my annual home policy renewal notice from State Insurance and noted that the premium for the coming year on my Christchurch property was going to be about 50% higher than last year - presumably due to their new risk profiling.

Not happy with this price gouging, I called AA Insurance and asked if they could do me a quote, and I must admit that I expected them to tell me to bugger off due to the property's location. However AA were happy to oblige, and after I answered all their questions and provided all my earthquake repair documentation, they were happy to take me on as a new customer with full cover on the same terms as my previous State policy(same sum insured, same excess, same or at least similar benefits). AA's premium quote was a similar price to State's - before they hiked their premium on me.

The cynic in me tends to think that some insurance companies are playing on the fact that most Christchurch people believe it is impossible or at least just too hard to change insurers. The reality of my experience proves otherwise. Yes it did take more than one phonecall, and yes I did have to provide evidence of quake repairs, but I spent less than one hour in total trying to organise it all, and I have saved about $600 a year going forward.

gehenna

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#2124760 13-Nov-2018 14:36

Surely the whole of NZ is a high risk area, especially for earthquakes. Wellington is on a fault, and the north island isn't wide enough for cities on both coasts not to be impacted in a big one. Auckland is on top of a bunch of volcanoes. BOP gets cyclones. Christchurch already had the big ones. Southland gets cut off from the rest of the country in winter. Seems like the safest place Northland and even there the flies are big enough to knock down the tiny houses that are popping up all over.

Bluntj

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#2124772 13-Nov-2018 14:47

Christchurch was not considered "high risk" prior to the earthquakes.

This is simply Insurance Companies getting greedier than usual. There are some places in NZ where people should not be inhabiting due to extremely high risk and as such should be uninsurable or at a high premium.

For 100 years Insurance companies have taken the highs with the lows and applied a mean to all of NZ and I believe this is what NZ expects. The Government cannot afford to tolerate large volumes of NZers not being insured or they will be forced to bring back another form of the "State Insurance".

To say Auckland is not a high risk is stupidity as they are at risk of tidal issues as well as volcanic activity. Auckland however provides a very high return due to the population density.

It is fairer for all NZers to contribute to insurance rather than only those that can afford it, and leave the State to pick up the pieces.

Coil

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#2124798 13-Nov-2018 15:12

gehenna:

Surely the whole of NZ is a high risk area, especially for earthquakes. Wellington is on a fault, and the north island isn't wide enough for cities on both coasts not to be impacted in a big one. Auckland is on top of a bunch of volcanoes. BOP gets cyclones. Christchurch already had the big ones. Southland gets cut off from the rest of the country in winter. Seems like the safest place Northland and even there the flies are big enough to knock down the tiny houses that are popping up all over.

As a Northland dweller for 15 years, Not sure what Flies you are talking about?
We got the best beaches, Safest environment, no earthquakes, no snow, barely any flooding.
On the other hand, highest gang concentration, one of the highest unemployed regions, some of the higher crime rates,
We traded natural disasters for human disasters... Don't go thinking Northland is some haven. Maybe if you are Mongrel mob or Black power but not otherwise...

MikeB4

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#2124809 13-Nov-2018 15:29

Coil:

gehenna:

Surely the whole of NZ is a high risk area, especially for earthquakes. Wellington is on a fault, and the north island isn't wide enough for cities on both coasts not to be impacted in a big one. Auckland is on top of a bunch of volcanoes. BOP gets cyclones. Christchurch already had the big ones. Southland gets cut off from the rest of the country in winter. Seems like the safest place Northland and even there the flies are big enough to knock down the tiny houses that are popping up all over.

As a Northland dweller for 15 years, Not sure what Flies you are talking about?
We got the best beaches, Safest environment, no earthquakes, no snow, barely any flooding.
On the other hand, highest gang concentration, one of the highest unemployed regions, some of the higher crime rates,
We traded natural disasters for human disasters... Don't go thinking Northland is some haven. Maybe if you are Mongrel mob or Black power but not otherwise...

You are not exempt from the affects of a rupture in the Kermedec/Hikurangi subduction zones. A major event especially the Kermedec section could see very destrucrive Tsunami and maybe damage due to shaking. You would also be affected by eruptions with in the Auckalnd Volcanic feild. The greatest risk is severe weather events coming out of the tropics in greater regularity and intensity.

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mattwnz

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#2124814 13-Nov-2018 15:36

I don't agree with it, and wasn't that the whole purpose of both EQC and a government run insurance scheme, that everyone shares the cost. IMO it is the kiwi thing to do, to look out for one another, but NZ has changed over recent times, especially in urban areas. To not do this, it is a similar situation to another earthquake occurring in Christchurch, and the rest of NZ saying, we won't provide any help to you after an earthquake as you knew the risk of living there, and you should have prepared. IMO that would be a sad day if that happened.

It is similar to paying taxes. I pay quite a bit of tax, but don't benefit as much as others from the services, and much of that money goes to other parts of NZ for roading etc. But I believe in paying my share of taxes as it helps NZ as a whole. But there are some who want everything to be fully userpays as you need it, and to reduce taxes. So some people end up paying a lot, depending on the resources you use, while others end up paying very little.

I think it is a slippery slope. You also get to the point where insurers basically put up premiums for some customers, so high due to them not really wanting that customer due to the high potential cost, and the customer then has no choice but to either not insure, or to change to another insurance provider, if their is one that is cheaper. But there doesn't seem to be that much competition, there are lots of brands, but many are owned by the same parent. You could also blame house prices, and all the regulation and costs in building.

Coil

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#2124817 13-Nov-2018 15:39

MikeB4:

Coil:

gehenna:

Surely the whole of NZ is a high risk area, especially for earthquakes. Wellington is on a fault, and the north island isn't wide enough for cities on both coasts not to be impacted in a big one. Auckland is on top of a bunch of volcanoes. BOP gets cyclones. Christchurch already had the big ones. Southland gets cut off from the rest of the country in winter. Seems like the safest place Northland and even there the flies are big enough to knock down the tiny houses that are popping up all over.

As a Northland dweller for 15 years, Not sure what Flies you are talking about?
We got the best beaches, Safest environment, no earthquakes, no snow, barely any flooding.
On the other hand, highest gang concentration, one of the highest unemployed regions, some of the higher crime rates,
We traded natural disasters for human disasters... Don't go thinking Northland is some haven. Maybe if you are Mongrel mob or Black power but not otherwise...

You are not exempt from the affects of a rupture in the Kermedec/Hikurangi subduction zones. A major event especially the Kermedec section could see very destrucrive Tsunami and maybe damage due to shaking. You would also be affected by eruptions with in the Auckalnd Volcanic feild. The greatest risk is severe weather events coming out of the tropics in greater regularity and intensity.

If anything along those lines happens, You and I will most likely be too dead to care.

DjShadow

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#2124819 13-Nov-2018 15:42

We managed to get a new House policy via Aon/Vero at the start of March in Lower hutt, AA Insurance were happy to take on new policies too but just needed a nod from an senior underwriter first.

mattwnz

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#2124823 13-Nov-2018 15:46

DjShadow:

We managed to get a new House policy via Aon/Vero at the start of March in Lower hutt, AA Insurance were happy to take on new policies too but just needed a nod from an senior underwriter first.

I am not aware of new houses not being able to get insurance? But you would hope that that would be a condition of the sales agreement, that the real estate agent would put in, that you can get insurance for it.

MikeB4

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#2124828 13-Nov-2018 15:54

Coil:

If anything along those lines happens, You and I will most likely be too dead to care.

Can't your BMW out run a Tsunami or Pyroclastic flow

MikeB4

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#2124829 13-Nov-2018 15:57

mattwnz:

DjShadow:

We managed to get a new House policy via Aon/Vero at the start of March in Lower hutt, AA Insurance were happy to take on new policies too but just needed a nod from an senior underwriter first.

I am not aware of new houses not being able to get insurance? But you would hope that that would be a condition of the sales agreement, that the real estate agent would put in, that you can get insurance for it.

We recently were dealing with our Lawyer about wills and stuff and the subject of property insurance came up. He advised that he has experienced a few clients having difficulty getting insurance on properties his advice was to stick with the one we have and avoid the stress unless our current insurer was causing greater stress.

Coil

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#2124831 13-Nov-2018 15:59

MikeB4:

Coil:

If anything along those lines happens, You and I will most likely be too dead to care.

Can't your BMW out run a Tsunami or Pyroclastic flow

It's slightly lower now with larger wheels and thinner tire sidewalls, If I had a few KM of dead flat tarmac in a straight line suuuureeeee. But if any of those events happen, I don't think we would have any straight piece of road or any infrastructure at all on both islands.

Got me thinking, What would you do if we lost all national power/telecomms/roading? Someone in their 70 series landcruiser would be fine but others like me in a city slicker would be buggered. I'd never put myself with the masses if there was to be some form of mass evac etc.

mattwnz

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#2124832 13-Nov-2018 16:01

Senecio:

All insurance is risk based. People in a higher risk category pay a higher premium.

- Car Insurance. A car garaged in Ponsonby will have a different premium to one parked on the road in South Auckland

- Health Insurance. A person with a known history of a family genetic disorder will pay a higher premium than others

- Travel Insurance. Someone who plans to skydive or off piste ski will pay a higher premium

I don't understand why you're objecting to the same principles being applied to housing insurance?

The other forms of insurance you mention are totally different to house insurance. A home is usually the persons largest asset for a start, and is also their shelter, and people have no control over natural disasters, and all NZ is prone to some form of natural disaster. Yes over time some areas maybe seen as higher risk of certain natural disasters, but insurance is supposed to even that cost out over the entire country.

Car insurance, not everyone has to have a car, and people are in control over where they chose to park their car, and if they have a security system for it.

Health insurance, we already have a state run health system paid for with taxes, so many people don't have extra insurance on top of that.

Travel insurance, people have the choice to travel, and that is just another cost associated with travel. People have to live in some form of a house, so even someone renting a house will have to pay more if insurance premiums go up.

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