Around 10,000 homes in Auckland, Christchurch, Wellington and Dunedin could become increasingly difficult or expensive to insure as early as 2035, according to a new government climate report. Its modelling suggests they will become uninsurable by mid-century. For brokers, the findings raise questions about how to advise clients holding or buying property in areas where cover may become unavailable or unaffordable within a decade.
The Our Atmosphere and Climate 2026 report, released on October 7 by the Ministry for Cities, Environment, Regions and Transport (MCERT) and Statistics New Zealand, warns that without insurance, affected homes would be ineligible for mortgage lending. That would make them harder to sell and reduce their market value.
"The increasing risks of disasters under climate change will result in homes in high-risk areas becoming uninsurable," the report states.
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The findings come as insurance affordability remains under sustained pressure across New Zealand. Since 2000, the price of house insurance has risen 916%, which Consumer NZ has identified as the largest price rise for any item tracked by the Consumers Price Index (CPI) over the past 25 years. Premiums have risen three times faster than CPI inflation since 2011.
The Reserve Bank of New Zealand (RBNZ) flagged the issue in its May 2026 Financial Stability Report. It noted the Natural Hazards Commission's (NHC) estimate that about 60,000 of the country's roughly 2 million domestic dwellings currently have no insurance cover. The central bank identified insurance affordability and retreat as "emerging pressures" that "indicate financial stability risks may increase."
The government launched a six-month review into home insurance affordability and costs in February, as outlined in a Cabinet paper published by the Treasury. That review period has since ended, and its findings have not been published.
The MCERT report quantifies the scale of exposure across several hazard types.
For inland flooding, modelling estimates that the homes of about 750,000 people are already exposed to a flood with a 1% annual likelihood. Regionally, about 55% of the population in the Kawerau and Buller districts, and about 63% in the Wairoa district, are exposed. Nationally, exposure is projected to rise to between 815,000 and 839,000 residents by 2050.
For rainfall-induced landslides, about 80,000 people's homes are already exposed, with projections indicating that between 111,000 and 127,000 residents could be exposed by 2050.
Coastal flooding currently affects about 32,000 people's homes, a figure projected to rise to between 48,000 and 52,000 by 2050.
"The climate we have known is entering uncharted territory," the report states.
Since the 28-day national state of emergency declared for Cyclone Gabrielle in 2023, every region except Taranaki has been affected by at least one local state of emergency because of extreme weather or flooding.
The report draws a direct line between climate risk, insurance availability and property values. People who want to sell uninsurable properties may end up selling at a "considerable loss, reducing their options to purchase homes elsewhere," it says.
The RBNZ has noted that banks may begin to restrict lending in high-risk areas, which would create pockets of financial exclusion where properties cannot be insured or mortgaged. The national average annual premium for domestic buildings cover is already about $2,900, according to the central bank's May 2026 report. That could rise further after a pending review of the Natural Hazards Commission levy, which is currently capped at $480 plus GST a year, with a building cover cap of $300,000 plus GST.
The Insurance Council of New Zealand (ICNZ) has also warned that insurance affordability and availability are at risk if hazard exposure is not reduced before disasters occur. ICNZ chief executive Kris Faafoi said in May: "Reducing risk is key to ensuring insurance remains accessible to Kiwi communities."
The trend is already visible locally. Two West Coast rating districts, Kowhitirangi and Vine Creek, have opted out of community flood insurance schemes, citing excess levels that made claims uneconomic. The decisions have been described as among the first formal withdrawals from flood cover by community groups in New Zealand.
For brokers, the practical points are about timing and disclosure. Clients buying in exposed areas need to understand that cover available today may not be available, or affordable, at future renewals. Existing clients in those areas should be told plainly how their insurability could change.
The report also identifies vulnerabilities for marae. Modelling estimates that 12 marae are already directly exposed to coastal flooding, and two to rainfall-induced landslides. A total of 100 marae (9%) are at risk of isolation from flooding, and 88 (8%) from landslides, because of their exposure through transport infrastructure.
"This isolation could prevent marae from fulfilling their roles as cultural centres and emergency hubs during disasters, potentially compromising both cultural continuity and community resilience," the report states.
Some marae have also faced challenges in accessing adequate insurance, particularly where multiple landowners or collective governance structures do not meet standard eligibility criteria.
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University of Auckland atmospheric chemist and senior lecturer Joel Rindelaub said the costs of climate change are not limited to disaster response. "As the NZ economy is heavily reliant on the environment through agriculture, fisheries, and tourism, an unstable climate is a very real threat to New Zealanders' income and food security," Rindelaub said.
Luke Harrington, a climate scientist and senior lecturer at the University of Waikato who served as a science adviser on the report, said gaps remain around compound events. "How long does it take for communities to recover following a significant flooding event? How can we more systematically document this recovery? And what happens if the next event comes along before this recovery is complete?" Harrington said.
