At the very end of last year, AA Insurance wrote to the Buller District mayor advising that the company would be putting a - what they call temporary - stop to new insurance policies for properties in the 7825 postcode, which includes Westport, Carters Beach, and Cape Foulwind.
If you listen to the experts, this is just the start. It’s already happening in flood‑risk towns in Australia, it’s now happened here, and it will keep happening until these towns find ways to keep themselves safe through measures like flood defences.
You don’t need me to tell you what this is going to do to property prices. They’re only going in one direction - down. Not least because you need insurance to take out a mortgage.
And you know what happens next, people start putting pressure on the Government to bail them out from dropping property values. They want the Government to buy their houses. They want the Government to provide insurance.
Because that’s what we always do when things go wrong, we turn to the Government to bail us out.
But the Government absolutely should not bail out anyone. Not just because the country cannot afford it - if every homeowner who loses insurance cover because of climate change in the coming decades, or who needs to be bought out for the same reason asks for help, it will cost the country billions of dollars we simply do not have.
But also because, as harsh as it sounds, if an insurance company will no longer cover your house, maybe your house should not be where it is. Maybe the insurance companies are doing us a favour by forcing us to make decisions we’ve been avoiding.
We’ve been dragging our heels on this stuff for decades. But you can’t argue with the market. We are still building in the wrong places - but you can’t argue with the market.
If insurers won’t cover it, taxpayers absolutely should not.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show. This article was sourced from Newstalk ZB.
7 comments:
It has nothing to do with climate change.
The misinformation bandied about by insurance companies is wrong.
Insurance issues for not just flooding but tidal surge (ask North Shore seaside and other coastal areas dwellers) and now slip potential will be added.
I'm continually amused when examples of poor town planning and drainage basin / land management practices are blamed on "climate change"
But what can one expect when for institutions like insurance companies and local authorities are run by morons?
Idiotic decisions.
Westport flooding was not related to climate change - it was related to gross mismanagement of waterways by the Westport council.
And insurer’s are simply taking advantage of the climate alarmism to profit gouge. There have not been more weather related disasters ….there have always been floods and storms and landslides.
Stop with the hoax
You can have flooding without invoking the magical 0.01% of CO2 (plant food) in the atmosphere
Who believes climate change chicken little rubbish these days anyway?? š¤¦♂️
"There have not been more weather related disasters ….there have always been floods and storms and landslides."
A household member is required to have professional indemnity insurance. This year, it was announced by the insurer that premiums for said insurance would be dropping, because of lower costs from a reduction in all risks in NZ.
If this can be the case with PI insurance, everyone here needs to challenge their insurance company over rising premiums, let alone refusal to insure on the basis of possible future natural disasters.
I think that we're justified in concluding that insurance companies are taking advantage of perceptions about the possible future effects of climate change. And looking for an excuse not to pay out on property damage.
With regard to climate change: of course it's changing! Climate is dynamic, not static. I've been a gardener for as long as I can remember. In my longish life, the climate has warmed, such that there's now no dormant period for pruning roses. They'll flower all year if one lets them do it. But climate change doesn't necessarily entail catastrophic weather events. In NZ, we've had grunty storms and floods since long before I was born. It's disingenuous to attribute such events to climate change.
I have a longstanding interest in science, and for many years followed climate science. In the late 90s or very early noughties, we were warned that parts of London would soon be under water because of rising sea levels. That hasn't happened. Note that differential sea level rise cannot be attributed to sea level rise generally. Water doesn't work that way. But land subsidence and erosion, due to seismic issues, will cause problems in some areas. We see this in parts of NZ.
Our neighbours cannot get insurance, because of flood risk from a stream that runs along the boundary of their property. However, their property is 40 metres higher than the stream and the stream catchment is tiny: during recent high rainfalls, the stream has not risen more than two metres. There is effectively zero risk of flooding their house, but insurance companies are not really interested in evaluating the actual risk; they appear to have just considered that they live near a stream, so must be a flood risk.
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