Reports warn about devastating impact of climate change on properties

Reports warn about devastating impact of climate change on properties | Insurance Business

Reports warn about devastating impact of climate change on properties

The National Institute of Water and Atmospheric Research (NIWA) and the Deep South National Science Challenge have released two reports warning about the devastating impact of climate change on properties and infrastructures.

The New Zealand Fluvial (river) and Pluvial (rainfall) Flood Exposure report found that almost 700,000 people, 411,516 buildings worth $135 billion, 19,098km of roads, 1,574km of railways, and 20 airports are currently exposed to river flooding if extreme weather events occur. It expects more extreme rainfall events to come due to climate change.

Meanwhile, the Coastal Flooding Exposure Under Future Sea Level Rise report found that 72,000 New Zealanders and 50,000 buildings worth $12.5 billion are currently exposed to extreme coastal flooding.

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Dr. Rob Bell, principal scientist at NIWA, warned that issues with getting property insurance are a lot closer than people think even though sea levels might still take years to rise.

Tim Grafton, chief executive officer at Insurance Council of New Zealand (ICNZ), aired the same sentiments, saying that it’s inevitable for some homes to become uninsurable – especially those in coastal areas.

Vero and IAG, the country’s largest insurers, also shared that their premiums reflect the risk – so they will definitely increase as a house’s risk increases.

“As the risk increases, and as a country if we do nothing about that risk, people will see the increasing risk reflected in the prices. At a point in the future, it is certain that parts of New Zealand will be underwater that aren’t today, and therefore, will be uninsurable,” Bryce Davies, climate sustainability spokesperson for IAG, told Newshub.

Sacha Cowlrick, executive consumer and insurance manager at Vero, advised potential homebuyers to “explore their insurance options before committing themselves to buying.”