Insurance study reveals country traumatised by past floods

Thursday, 1 May 2025

It's been over two years since the 2023 flooding in Auckland, and homes that were innundated in the wealthy suburb of Mount Eden, and are earmarked for demolition, remain shuttered and abandoned.

When MetService extreme weather warnings hit their phones, more than half of New Zealanders feel a chill of anxiety.

The massive storms that hit the country in early 2023 appear to have left many traumatised, a survey by home and contents insurer IAG indicates.

Ipsos research ‒ commissioned by AMI, State and NZI Insurance conducted in March of just over 1000 people ‒ showed 52% of people felt anxiety about flooding.

Lyall Carter, an Auckland resident whose West Auckland home was flooded in the 2023 Auckland anniversary storm, said he still felt a stab of anxiety when it starts to rain heavily, despite having moved to a home high on a hill.

“We got bought out, but every time it rains, you still think, ‘Shit, it’s going to flood’,” he said.

He was still in contact with other West Aucklanders who had suffered flooding, and they had similar trauma reactions to storms.

A severe storm lashed the city on Friday night

“Our customers often tell us about the psychological and emotional impact of wild weather, and the effect of being displaced or losing their home on their wellbeing. These impacts can last far longer than physical damage, and raise concerns about the ongoing wellbeing of affected communities,” said IAG New Zealand chief executive Amanda Whiting.

That trauma appears to have led to greater caution among home buyers.

IAG said when asked whether people would consider natural disaster risk when buying a new home, 89% said they would.

Before the storms and flooding in early 2023, the number who said they would was just 55%.

Lyall Carter is the chair of West Auckland is Flooding, and is in contact with many people whose home were flooded two years ago.

IAG said if a property is up for sale, the vendor and their real estate agent have an obligation to disclose what they know about the property, which should include any known risks.

While people in the North Island still fear storms the most, in the South Island earthquakes remain the number one fear.

It appears there has also been a rise in the proportion of people who feel prepared for wild weather, which may indicate homeowners have invested to make their homes more resilient.

IAG Wild Weather Tracker shows claims from storms handled by IAG in the six months to the end of February 2025.

IAG, the country’s largest insurer, said there had been fewer storm claims this spring and summer compared with last year, however MetService issued a total of 89 weather warnings for rain.

There were six “significant” storms from the perspective of insurers, with almost 30% of the claims IAG got coming after flooding in Dunedin and the wider Otago region last October.

In the six months to the end of February, three states of local emergency were declared due to heavy rainfall in the West Coast and Otago regions, where flood damage and slips isolated communities, IAG said.

Wild weather and the flooding it brings has revealed many homes are at risk.

IAG had 57% fewer claims than in the same period last year, with 2868 weather-related claims.

That was the lowest number of claims in any of the seven six-month periods for which IAG has published its Wild Weather Tracker data.

The highest came as a result of the Auckland Anniversary Weekend flooding in January 2023, and the cyclone that hit the North Island in early February of that year.

In the six months from September 2022 to February 2023, IAG had 41,596 weather-related claims.

The Insurance Council Te Kāhui Inihua o Aotearoa, the industry lobby body for insurers, said on Wednesday that households were facing higher premiums due to the rising cost of extreme weather events, the growing value of our assets, inflation in the building, construction and vehicle repair sectors, the rising cost to insurers of doing business, and taxes and levies.

The cost of repairing a home was now 20% more than before the Covid pandemic, it said.

There had also been a 30% increase in the premiums New Zealand insurance companies paid to giant overseas reinsurers as a result of New Zealand’s exposure to extreme weather, it said.

It said the Auckland Anniversary Weekend floods and Cyclone Gabrielle resulted in 15 deaths, thousands of evacuations, and significant damage to homes, businesses, and infrastructure, with an estimated economic cost to New Zealand of up to $14.5 billion.

It also said far too many homes had been built in “harm’s way”.

An estimated 675,000 people lived in areas prone to flooding, it said.

The council has been pushing for a national climate adaptation plan, including creating or naming a lead agency on climate adaptation to bring together central government, councils, the private sector and communities to effectively mitigate risks and ensure sustainable adaptation measures.