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Wellington City Council is calling for a forum with the government’s Earthquake Commission Minister, insurance companies, and affected stakeholders, to discuss rising insurance premiums.
The move follows the announcement by New Zealand’s largest insurer, IAG, that it will roll out a risk-based pricing model to all its brands. This means the insurer will start to charge higher home and contents premiums for customers who live in areas prone to natural disasters and severe weather.
“IAG has between 40 and 50% of the Wellington market, so this could potentially affect a lot of our residents,” Wellington Mayor Justin Lester said. “This will be a daunting prospect for those facing increasing premiums on the homes they already own, and also make it even more difficult for first home buyers.”
The mayor said he had raised the issue with the Minister Responsible for the Earthquake Commission Megan Woods, and he will be convening an insurance forum. The Insurance Council of New Zealand (ICNZ), IAG, body corporate and homeowner representatives who are significantly affected by premium increases will be invited.
“I want to canvas issues in the Wellington market and look at the immediate and long-term future for people needing insurance,” Lester said. “It may be that the government needs to consider what insurance companies are required to offer in a market, and they may have to offer an affordable option where they operate.
“Residents, businesses and property owners are now facing the prospect of higher premiums. Some may not be able to afford it.
“Insurance is crucial for a city. It has to be available and affordable for banks to lend, for businesses to operate efficiently, and for people to have peace of mind,” he added.
