Treading Water: Flood maps, managed retreat and cost-sharing for storm-damaged homes

Friday, 15 May 2026

With New Zealand experiencing a storm on average every eight days, thousands of properties in coastal inundation and flood zones could become uninsurable. Our new series explores the impacts of relentless weather events on families and communities, asks for how much longer insurance will be available, and how the Government is planning to respond.

Simon Watts is confident his upcoming flood map won’t devalue homes listed as high-risk.

The Climate Change Minister says the map - designed to be source of flood risk information for the entire country - has been a focus for the Government this term, while working out how storm-damaged homes will be paid out is on the cards for the next three years.

He spoke to The Post about climate change-related home buyouts and rising insurance premiums as part of its Treading Water series.

Insurance

The latest National Climate Change Risk Assessment found insurance premiums have increased by 900% since the year 2000 with high prices meaning some areas may not be able to access insurance by 2035.

Watts said the frequency of weather events in New Zealand and the pressure on insurance companies was increasing.

It was reported earlier this year that AA Insurance would stop issuing new policies in the South Island town of Westport due to its flood risks and some Canterbury townships due to seismic risk.

The Post asked Watts if insurance companies had signalled areas where they were going to stop offering insurance going forward.

“They don’t talk about specifics with us around that, but we are working with insurers in terms of making sure that their information of where they see risk in communities is the same risk we are using when we are thinking about where we target infrastructure investment.”

Watts said they were seeing insurers using targeted risk assessments on particularly communities because there was better information to do so.

“That means certain communities are paying more for insurance than others.”

It was important New Zealand had a working insurance market into the future, he said, and noted in other countries there had been insurance retreat where homeowners had been left high and dry.

Flood map

The New Zealand flood map is set to be published in 2027. It would will give New Zealanders the ability to see where flooding from rivers, heavy rain, or the sea is likely to happen now and in the future.

Watts did not believe the map would devalue homes identified as high-risk properties because risk-based modelling to set premiums was already the status quo.

Information now was fragmented and there was no “one source of the truth”.

“It should not be a surprise to you as a household that you sit in a flood-prone area.”

Flooding was only one hazard and over time the plan would need to be broadened for other scenarios, Watts said.

He said there was a risk that even with the extra information people could not afford to make a change to where they were living.

“We do need to think about that, that is complex and that is something that we will look to next term.”

Cost-sharing for home buyouts

In recent years the Government has had to help with the buyouts of properties after events such as the Auckland Anniversary floods.

At a conference in November Watts said there was a “fiscal reality here that we cannot afford to continue just to write cheques in this area”, with regard to home buyouts.

When The Post put that comment to him, he said he was trying to address that “at a point in the future, that might be decades from now the assumption that the Government will always stump up and write a cheque in the instance of a natural hazard disaster is not something that can be assumed”.

There would be no line in the sand moment where the Government would stop providing home buyouts, but a future discussion about when and for what type of events it may act.

It could involve cost-sharing with property owner, the insurer, local government and central government.

A framework for when managed retreat (where the state buys a home in a risky area) is used needed to be developed also. It was the “worst-case scenario” because it was the most expensive way to deal with the problem, Watts said.