Government told to prepare for compensation for uninsurable homes

Government told to prepare for compensation for uninsurable homes | Insurance Business

Government told to prepare for compensation for uninsurable homes
The New Zealand government needs to prepare itself for compensation claims as houses could be left uninsurable thanks to rising sea-levels.

Dr Jan Wright, parliamentary commissioner for the Environment, warned MPs that they need to consider the consequences of rising sea-levels now as customers grapple with insurance issues.

“When houses become uninsurable, or insurance becomes unaffordable, or there are certain restrictions put into policies, people are going to be very upset,” Dr Wright said, according to RadioNz.co.nz.

"And so if there are claims of compensation, how does that break down between local government and central government? I just think it's not too early to start to think about those issues.”

In a report delivered to government last year, Wright identified at least 9000 homes across New Zealand that were located less than 50cm above spring high tides.

Dr Wright drew comparisons with Christchurch which saw government pay compensation for those uninsured or underinsured.

“You just need to look at the red zone in Christchurch where people who were uninsured, the government still needed to pay out some money in the end," Dr Wright continued.

In her submission to government, Dr Wright quoted Mark Carney, governor of the Bank of England, as time is running out to address some issues.
“The combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity,” Carney said.

“While there is still time to act, the window of opportunity is finite and shrinking.”

Dr Wright also called for real estate agents to include the risk of sea-level rise or flooding when selling a property so that prospective owners could be more informed.


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