The Insurance Council of New Zealand (ICNZ) is urging the government to ensure that its proposed Resource Management Act (RMA) changes help protect local communities by avoiding building in "dumb" places.
The government has outlined plans to replace the RMA with Phase 2 to introduce a package of national direction that councils must implement. The changes include the development of a National Direction for natural hazards and provide the ability to decline land use consents, or attach conditions, where there are significant risks from natural hazards.
"We support enabling growth where natural hazard risk is well managed. However, if we allow development in high-risk locations, we risk putting people in harm’s way and ultimately worse outcomes for New Zealanders," ICNZ chief executive Kris Faafoi said.
"We know the country faces the prospect of more frequent and severe weather events. The impact of the extreme North Island weather events in early 2023 on lives, property, and the economy was significant, with over NZ$3.8bn ($2.4bn) paid out in claims alone and billions more in damaged roads and other infrastructure networks.
"The development of a National Direction will provide consistency in identifying and managing natural hazards and help ensure we build in the right places. This is turn will strengthen the country’s economic and community resilience and provide certainty to homeowners and businesses that insurance will be there when they need it.
"New Zealand is particularly vulnerable to natural hazards risks. The Climate Change Commission reported around 750,000 people and 461,000 buildings are at risk of coastal inundation or inland flooding, involving many billions of dollars in assets.
"Where the risk becomes too high, insurance may not be affordable or available which has an impact on property values and the housing market and puts pressure on the government to invest in protection or compensate owners,” Mr Faafoi said.