About 60,000 homes in New Zealand are not insured, according to Natural Hazards Commission\u00a0Toka T\u016b Ake chairman Chris Black.<\/p>\n
The commission\u2019s chief executive Tina Mitchell says while there has not been a massive decrease to its levy income, suggesting people are still buying insurance, whether they\u2019re insured to the full sum amount is another question.<\/p>\n
Mitchell, Black and the NHC\u2019s chief strategy officer Michala Beacham spoke at Parliament’s Finance and Expenditure Committee meeting on Wednesday about the NHC\u2019s annual review for 2024\/2025.<\/p>\n
\u201cOur levy income hasn\u2019t reduced so we know the national portfolio is well insured – whether it\u2019s fully insured is not something we would have sight over,\u201d Mitchell says, as the NHC only covers the first $300,000.<\/p>\n
\u201cWe know what the number of houses are in New Zealand \u2026 For each one of those houses we would expect to get a levy income \u2026 We are not seeing a massive dip in our levy income which suggests everyone is still buying insurance, at least to $300,000.\u201d<\/p>\n
Black says there were three important components: access to insurance, affordability of insurance and adequacy of the insurance.<\/p>\n
\u201cYou can have access to something that\u2019s affordable but it\u2019s not adequate.\u201d<\/p>\n
As part of their insurance premium, homeowners pay a Natural Hazards Insurance Levy<\/a>.<\/p>\n This money goes into the Natural Hazard Fund and is used to cover claims after a natural hazard event. The fund is also used to buy reinsurance from international financial markets, meet the costs of administering the Natural Hazards Commission\u00a0Toka T\u016b Ake (NHC) Scheme and goes towards research and education.<\/p>\n For each natural hazard event, the NHC currently pays $300,000 towards rebuilding or repairing a residential home<\/a>. This is called a building cover cap and currently, the Natural Hazards Insurance Levy is 16 cents per $100 of the insurance cover amount.<\/p>\n NHC Levy ‘does need to go up at some stage’<\/p>\n In November, interest.co.nz reported the Government was pushing out its decision<\/a> on whether to increase the Natural Hazards Insurance Levy with Finance Minister Nicola Willis saying at the time insurance was a major cost-of-living pressure for New Zealanders.<\/p>\n The Treasury had been consulting with industry professionals, experts and community representatives to look into the financial settings and levy settings<\/a> under the Natural Hazards Insurance Act 2023. Options were put forward to maintain the levy at its current rate or to bump it up.<\/p>\n The options put forward for consultation were to maintain the levy at its current rate of 16 cents per $100 of cover, or increase the rate to either 22 cents, 24 cents or 25 cents per $100 of cover. In the consultation document, 24 cents per $100 of cover is considered the technical levy rate.<\/p>\n If kept at 16 cents per $100 of cover, this would be $480 per year. If it went up to 22 cents, it would be $660 per year and $720 if it went up to 24 cents per $100 of cover. For 25 cents per $100 of cover, it would be $750 per year.<\/p>\n The $300,000 building cover cap, the maximum amount the NHC can pay for a building claim, was also looked at, with options to keep it the same or increase it to $400,000.<\/p>\n Asked about the delay, Black says: \u201cThat\u2019s a decision for the Government of the day and at the moment, I think the priority seems to be on the review of private sector insurance so I imagine it will come back onto the table after that but it does need to go up at some stage.\u201d<\/p>\n