Wairarapa has most expensive house insurance

Thursday, 25 July 2024

Wairarapa has the ignominious distinction of having some of the highest house insurance rates in New Zealand.

Wairarapa and Wellington Central were the two most expensive places in New Zealand to insure homes, according to a Treasury report.

The report, prepared by consultancy Finity, outlined data collected in April showed Wairarapa’s insurance had gone up almost 5% in the first quarter of the year.

Treasury commissioned the series of reports as there are major financial stability and fiscal risks to taxpayers, if homeowners cannot get insurance for risks like flooding, or cannot afford to pay for it.

Finity chart comparing the percentage difference between the average cheapest premiums available online at the regional level to the national average to the the September 2022 collection.

Finity found, the while Wellington Central and Wairarapa has the most expensive insurance, Auckland and Northland had the cheapest house insurance.

The report showed that Wairarapa’s average cheapest house insurance quote as of April 2024 was $2296, and the average dearest was $4000, were the most expensive in New Zealand.

This compared to the national average cheapest $1839 and dearest $2619. Northland’s comparable prices were $1650 and $2479 respectively.

Premiums continued to rise throughout most of the country, Finity told Treasury, but the availability of insurance for earthquake risk remained widespread, with most homes getting online quotes from at least three insurers.

A series of disastrous flooding events, including last year’s Auckland Anniversary weekend flooding, and Cyclone Gabrielle, have seen taxpayers and ratepayers stumping up to buy homes from owners, where those homes were considered no longer to be safe to live in.

The floods have also prompted fears that insurers may pull out of some areas - a process known as “insurance retreat”.

Wairarapa people are paying more for their insurance that any other region.

Finity reported to Treasury that in the first quarter of the year, insurance remained generally available for people living in flood-prone areas.

It sought online quotes from insurers for 3510 home “profiles”, with the quotes sought from IAG companies State and AMI, as well as Vero, Tower and AA Insurance.

Treasury is monitoring the availablity, and affordability, of house insurance as fears of ‘insurance retreat’ mount.

Owners of homes that were at high risk of flooding were able in 92% of cases still able to get online quotes from at least two different insurers.

However, Finity also found that insurers quoted extra premiums for highly-flood prone homes compared to homes not threatened by flooding.

Central Wellington (pictured) and the Wairarapa are now the most expensive places to insure homes.

Treasury’s latest insurance monitoring report shows insurers continue to roll out risk-based pricing across the properties they insure, with those at highest risk of flooding being quoted an extra $4500 in premiums.

Risk-based pricing sees individual properties with higher flood, earthquake or other risk being charged more for insurance.

Despite the increased roll-out of risk-based pricing for insurance, there remains a long way for the process to go before it is universal.

Finity did not find evidence that homes in tsunami zones are at a higher risk of landslip, or areas at higher risk of liquifaction were yet being charged more, or were finding it hard to get insurance.