Landslides have become the single largest source of claims to New Zealand’s national natural hazards scheme, a shift underscored this week when a run of slips across Otago forced residents from their homes during severe South Island weather. For insurers, the episode highlights a structural change in the risk landscape and a widening gap between what the public scheme covers and where private exposure sits.
The Natural Hazards Commission Toka Tū Ake (NHC Toka Tū Ake) reported in May that it was receiving more claims for landslide damage than for any other natural hazard following a period of frequent storms. It recorded almost 13,000 landslide claims over the past five years, roughly 10,000 more than in the previous five-year period. “Landslides can happen with little warning and cause significant damage to homes and property – and in some cases put lives at risk. As storms become more frequent and intense, landslides are understandably a growing concern for many communities,” NHC Toka Tū Ake chief executive Tina Mitchell said.
That trend sits within a broader loss picture. The Insurance Council of New Zealand’s (ICNZ) 2025 Annual Review put total insurance claims across all lines at $3.8 billion for the year, and noted global insured losses from natural catastrophes exceeded US$100 billion for the sixth consecutive year in 2025. ICNZ members write more than 95% of general insurance in the country and cover over $2 trillion of assets.
Emergency services were called to the Cove on Otago Peninsula about 3:55pm on July 8, where nine properties in Irvine Rd were affected, the Otago Daily Times reported. Two houses were evacuated initially, but police advised that further houses had to be vacated; by 9:30pm, residents were allowed back into six properties. A separate slip was reported the same afternoon on Glen St in Oamaru, where land moved into a house, bringing to three the number of properties evacuated in the North Otago town after its second slip in days, according to the Otago Daily Times.
No injuries were reported. A geotechnical engineer assessed the Dunedin site while crews stood by, with findings to inform any further evacuations, a Fire and Emergency New Zealand (FENZ) spokesperson told 1News. The slips occurred while a state of emergency remained in place for the Kaikōura and Waitaki districts, the latter including Oamaru, 1News reported. In Kaikōura, MetService recorded roughly two months’ worth of rain over 48 hours. Radio New Zealand reported that the Kaikōura District Council said floodwaters were receding, with road closures including State Highway 1 from Ward to Waipara.
The commercial significance for insurers lies in how the loss is split. Under the Natural Hazards Insurance Act 2023, which took effect on July 1, 2024, and replaced the Earthquake Commission Act 1993, the scheme provides first-loss residential building cover of up to $300,000 plus GST, with any damage above that met by the homeowner’s private policy, according to NHC Toka Tū Ake and the New Zealand Treasury. The building cap is subject to review at least every five years.
Cover for land is more limited. For storm and flood events the commission covers residential land only, leaving building damage to the private insurer. Land cover generally applies to the area immediately around the home, up to eight metres, and retaining walls are covered to a maximum of $50,000 plus GST per dwelling, with bridges and culverts to $25,000 plus GST, per the commission. Rising construction costs mean more claims breach the cap, ICNZ said, transferring a larger share of each loss to private insurers.
The location of this week’s slips maps onto where the projected rainfall increase is largest. Modelling published by NIWA, now Earth Sciences New Zealand, projects that almost the entire country will see some increase in heavy rainfall, with increases above 30% across much of Otago and Southland under a high-emissions scenario. The agency notes that a warmer atmosphere holds more moisture, raising the potential for more intense rainfall events, and that the most extreme events, such as one-in-100-year rainfall, are expected to show even larger increases.
Reinsurer commentary reproduced in the ICNZ review frames why accumulation matters for capacity and pricing. Swiss Re said cumulative losses from storms, floods, and wildfires remain significant even in years without headline earthquakes or cyclones, while Munich Re said weather disasters accounted for 92% of all 2025 losses and 97% of insured losses globally. Aon said rising property values and asset concentration amplify the financial impact when hazards strike.
ICNZ has tied the pattern to policy, arguing some communities already face repeated losses and framing 2026, an election year, as a test of momentum on climate adaptation. For underwriters, the Otago slips are a small event, but the claims-frequency signal behind them – set against a region projected to see some of the country’s steepest rainfall increases – is the one carrying pricing and risk-selection consequences for slope-adjacent residential property.
