Property insurance premiums across New Zealand have increased by nearly 30% in just 18 months, with more insurers now pricing down to address level as their risk modelling becomes more sophisticated.
New Treasury data show that a quarter of houses in high flood-risk areas are attracting extra insurance premiums of hundreds or even thousands of dollars, according to an RNZ report citing actuarial consultancy Finity and Treasury.
Finity has monitored insurance premiums on behalf of Treasury since late 2022, for a dataset of properties chosen to match New Zealand's natural hazards profile. Since October 2023, the monitoring has expanded to include 1,710 properties in suburbs around the country that are known to be flood-affected, either by river or surface flooding.
The most recent monitoring report, based on April 2024 data but released this week, showed that insurance remained widely available.
Availability of insurance quotes
For homes in the seismic dataset, 93% could get an online quote from at least two of the four underwriters included in the Finity monitoring (IAG, Tower, AA Insurance and Vero). The exception was Canterbury, where nearly half of properties could not get more than a single quote.
For high flood risk properties, 92% could also get online quotes from at least two underwriters; but 25% of those were quoted an additional flood premium of at least NZ$250 ($149). In the most extreme cases, the flood premium was up to NZ$4,500, although the vast majority of elevated flood premiums were less than NZ$1,000.
Despite broad availability, properties in some flood-affected suburbs did struggle to get multiple online quotes.
In the Christchurch suburbs of Avondale and Woolston, no high-risk properties in the dataset were able to get more than one online quote. Even low-risk properties struggled, with just 10 percent of Woolston properties and no Avondale properties able to secure a second quote.
"We can see by the difference in availability between high/low risk properties and no risk properties that at least some insurers are likely using flood risk as a driver for underwriting criteria," the report authors said.
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