Coastal homes face climate risk
Homeowners in coastal regions of Australia and New Zealand will suffer a big decline in property values if insurers withdraw cover to minimise exposure to climate change.
Insurance Council of New Zealand (ICNZ) CEO Chris Ryan says some insurers are refusing policies for dwellings that don’t have flood protection measures, but most are “bending over backwards” to provide cover.
He says the issue is not crucial at the moment. However, in a decade or two, when the effects of climate change become more recognised, it may well be.
Climate risk consultant Karl Mellon says uninsurable properties in coastal communities could lose up to 80% of their value.
Climate change will be a prime motivator for insurers to dump policies in certain regions, according to UN’s Intergovernmental Panel on Climate Change, which found increasing tropical cyclone activity would mean the withdrawal of private insurer cover in vulnerable areas.
The report contained other climate change predictions affecting Australasia: reduced rainfall and increased evaporation, water shortages in southern and eastern Australia and northern NZ, and substantial loss of biodiversity by 2020.
Institution of Professional Engineers NZ President Jeff Jones says the report puts local government on notice to manage climate change risk in their communities.
“Ultimately New Zealanders will pay for climate change – through insurance or rates rises to improve protection, or through meeting the cost of recovery after events.”
Mr Ryan says insurance cover for coastal regions is no longer a given.
“This report is the beginning of a change of awareness for coastal property owners. They can’t assume they will always be insured. Some properties will have higher premiums or extended exclusions for climate change.”
Insurance Council of New Zealand (ICNZ) CEO Chris Ryan says some insurers are refusing policies for dwellings that don’t have flood protection measures, but most are “bending over backwards” to provide cover.
He says the issue is not crucial at the moment. However, in a decade or two, when the effects of climate change become more recognised, it may well be.
Climate risk consultant Karl Mellon says uninsurable properties in coastal communities could lose up to 80% of their value.
Climate change will be a prime motivator for insurers to dump policies in certain regions, according to UN’s Intergovernmental Panel on Climate Change, which found increasing tropical cyclone activity would mean the withdrawal of private insurer cover in vulnerable areas.
The report contained other climate change predictions affecting Australasia: reduced rainfall and increased evaporation, water shortages in southern and eastern Australia and northern NZ, and substantial loss of biodiversity by 2020.
Institution of Professional Engineers NZ President Jeff Jones says the report puts local government on notice to manage climate change risk in their communities.
“Ultimately New Zealanders will pay for climate change – through insurance or rates rises to improve protection, or through meeting the cost of recovery after events.”
Mr Ryan says insurance cover for coastal regions is no longer a given.
“This report is the beginning of a change of awareness for coastal property owners. They can’t assume they will always be insured. Some properties will have higher premiums or extended exclusions for climate change.”