AA Insurance has gone the extra mile and stopped issuing new home insurance policies in places like Westport due to flood risk, and Woodend in North Canterbury due to seismic risk.<\/p>\n
A 2024 Helen Clark Foundation report estimated 10,000 coastal properties in Dunedin, Christchurch, Wellington and Auckland could become uninsurable in the next 25 years.<\/p>\n
Bernard Hickey, a journalist and publisher of The K\u0101k\u0101, told The Front Page<\/a> that when insurers pull back from high-risk towns or suburbs, properties can become uninsurable and unbankable.<\/p>\n \u201cThe key thing to know here is that for most New Zealanders, the value of their home really is their financial futures. It\u2019s not just a place to live. They rely on it to potentially sell once they\u2019re empty nesters and downsize, then use any spare equity to help them in their retirement.<\/p>\n \u201cSo once a town is uninsurable, it\u2019s also unbankable. And when something is unbankable, that means it\u2019s pretty much worthless because you don\u2019t have the same competition to buy the house from people who are able to borrow money,\u201d he said.<\/p>\n Hickey said that some people only discover at the last minute that they can\u2019t get insurance or finance, creating \u201cneutron bomb\u201d moments for household finances. <\/p>\n \u201cThere are some interesting problems here where often the owner of the house will have been told by the insurer that their insurance may not roll over or suddenly the pricing\u2019s going to change and they can sell their house, but they know that whoever\u2019s going to buy it is going to really struggle to get insurance. <\/p>\n \u201cLiterally, people are receiving letters in their mailboxes, which are a bit like neutron bombs for their personal finances. Suddenly, they realise not only are they going to struggle to get their own reinsurance, or it\u2019s going to cost a lot more, but they\u2019ll really struggle to sell their place,\u201d he said. <\/p>\n Existing owners may be tempted to sell before disclosing these risks, Hickey said, taking a \u201cI know nothing, I see nothing\u201d approach.<\/p>\n \u201cThere\u2019ll be a bunch of real estate agents and home owners who really don\u2019t want to know. You get to a point where, if you suspect that your house may not be insurable, do you sell first and ask questions later? Because then you can\u2019t be accused of knowing something and not telling it,\u201d he said. <\/p>\n This means now more than ever, buyers need to do their research. <\/p>\n \u201cBefore you buy a house, you want to be absolutely sure that you can handle, for example, three degrees of warming. It\u2019s clear now that we\u2019re going to have probably two degrees of warming within 20 years or so, and we know from the climate scientists that means even more extreme and more frequent weather events like Cyclone Gabrielle.<\/p>\n \u201cThis is the issue here for people in New Zealand because we are so reliant on our houses for our financial futures, even more so than the likes of Australia or the US,\u201d he said.<\/p>\n Listen to the full episode<\/a> to hear more about:<\/p>\n Climate change and insuranceGovernment bailouts are off the table Possible policy changesA responsibility to educate.<\/p>\n The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime\/justice reporting who joined NZME in 2016.<\/p>\n You can follow the podcast at iHeartRadio<\/a>, Apple Podcasts<\/a>, Spotify<\/a> or wherever you get your podcasts.<\/p>\n","protected":false},"excerpt":{"rendered":"AA Insurance has gone the extra mile and stopped issuing new home insurance policies in places like Westport…\n","protected":false},"author":2,"featured_media":274802,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[16717,10141,16640,28491,138,12974,4442,219,1668,305,6800,96886,194,111,139,69,1118,90,28630,43296,11588,223,165,1555,45083],"class_list":["post-274801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-becoming","tag-begun","tag-bites","tag-brink","tag-business","tag-change","tag-climate","tag-economy","tag-front","tag-have","tag-homes","tag-insurers","tag-kiwi","tag-new-zealand","tag-newzealand","tag-nz","tag-of","tag-on","tag-page","tag-puts","tag-retreat","tag-the","tag-their","tag-threat","tag-worthless"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/274801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=274801"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/274801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/274802"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=274801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=274801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=274801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}