Rising sea levels because of climate change risks pushing up the insurance bills of thousands of New Zealanders, if they can even get insurance at all.
Martin Hill, who lives in Hector on the West Coast, is one of them. He’s an owner of one of the 450,000 homes within one kilometre of the coast likely to be hit by more frequent storms and rising sea levels.
“I am insured there … but because my property is marked as having an inundation risk, I have a very high excess on the insurance," he said.
Hill’s reality is becoming increasingly common, according to new research for the Deep South National Science Challenge by insurance and asset valuation specialist Belinda Storey.
Her report estimates that 10,000 coastal property owners in Auckland, Wellington, Christchurch and Dunedin that have houses in one-in-100-year coastal flood zones could see their premiums rise nearly five times what the current medians for each city are.
For many, it will be a question if they can get cover at all.
The report found that all it would take for that increase in insurance bills is for sea levels to rise by as little as 10cm.
In Auckland, which is expected to have the highest premiums of the major centres, the expected median premium with a 15cm sea level rise would be $10,000.
“Insurers would rather stop insuring you once the cost of insurance gets so high,” Storey said.
The Insurance Council doubts providers will give up on existing clients, but they warned homeowners they would pay more.
The council is now calling for new builds to be banned from unsuitable sites.
“I think there are a whole set of complex issues here that have to be worked through,” Insurance Council chief executive Tim Grafton said.
He said central Government also had a role to play.