Insurers Welcome Next Step In Climate Disaster Recovery

The Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) welcomes the next step in the recovery from the twin climate disasters of the Auckland Anniversary Weekend floods and Cyclone Gabrielle. ICNZ acknowledges this will provide certainty for many customers, but some customers will not have all the information they need to make decisions on their next steps.

"Regardless of the category your local Council has determined your property falls into, your insurance company will continue to work with you as normal on your insurance claim. Your contractual rights under your insurance claim are between you and your insurer. They are unaffected by the category your property has been placed into. Your insurance policy pays for the physical damage to your house up to your Sum Insured or any other policy limits and benefits that may apply. Whether you repair in situ, make improvements, or move to another property, your insurance monies can be put toward your recovery," said ICNZ Chief Executive, Tim Grafton.

"For those customers that have been notified their property is in a Category One area, meaning councils won’t require additional work beyond returning things to how they were before, this will provide the certainty to proceed with their recovery," said Tim.

"For those properties in Category Two areas, additional work is required to reduce risks at either a property or community level. Your insurer will continue to settle your claim as your insurance policy provides coverage for the physical damage incurred under your policy. In consultation with your insurer, you may wish to wait until the conclusion of your local Council’s process before undertaking repairs on your property. Your insurance company will work together with you when you are ready," he said.

"For those properties in Category Three areas, where it is deemed there is an unacceptable risk of future flooding and it may no longer be safe for people to live there, again your claim will continue as your policy benefits provide for coverage for physical damage, up to any policy limits. Your insurer will cash settle your policy so that you can make decisions on your next steps. The details of what will happen to your claim in the event of any property buyout are still being worked through.

"The decisions ahead for communities are much bigger than insurance and property damage. We support councils taking a long-term view and addressing the need to keep people out of harm’s way and looking at solutions for reducing risks," said Tim.

"We know from previous disasters that for those worst affected this is often a very stressful and uncertain time. Even when there is a clear process in place there is a lot to work through. This can take time and care is needed to reach the best outcome available. For many, today’s announcements are just the start and we are all waiting for more detail, both on specific measures required by councils as well as any additional council help that may become available to either make repairs or to move on. Insurers will support their customers through this and meet their claims in line with their policies," said Tim.

Combined, the two events have already resulted in more than 100,000 claims with an estimated value to date of over $2.8 billion.

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