Homeowners in some of the most popular places in New Zealand risk having “no cover at all” if a natural hazard strikes, brokers warn.  

Papamoa in Tauranga received most votes in the recent Trade Me Property People’s Choicest Awards for best suburb, while the runners up were Southshore in Christchurch and Morrinsville between the Kaimai Ranges and Waikato River.

Insurance Brokers Association of New Zealand CEO Mel Gorham says all three may contain properties prone to threats such as flooding, erosion, subsidence, falling debris and slippage.

This can cause local authorities to put Natural Hazard Section Notices on their titles.

The notices give the Natural Hazards Commission power to fully or partly decline up to $300,000 of cover if damage is caused by a specified hazard.

Ms Gorham warns that, in addition, some private insurers will only pay out once the commission accepts its portion of the claim.  

“This could leave the property owner with no cover at all for what is likely to be the most significant natural hazard their property faces,” she said.

The notices respond to section 72 of the Building Act, which obliges authorities to issue building consent in an area where there is a known natural hazard if the work will not make the hazard worse.  

IBANZ says the implications for insurance are not well enough understood and need to be factored into decisions about where to live.

Trade Me Property customer director Gavin Lloyd says the top three suburbs all have “close proximity to nature”.