IAG says it won't offer ongoing insurance for properties in Category 3 of the Government's Land Categorisation framework in regions hard hit by extreme weather earlier this year, customers with properties in Category 2P and 2C could see changes to their insurance, and for properties in Category 1, IAG will consider flood risk and landslip hazards that might impact customers' premiums and excess.
The Government announced the Land Categorisation framework for properties damaged in Cyclone Gabrielle and the late-January floods in the upper North Island. IAG is New Zealand's biggest general insurer and includes the AMI, State and NZI brands.
Wayne Tippet, IAG's Executive General Manager of Events Response, says the insurer has moved as quickly as possible to clarify its position. It's contacting customers in impacted regions who have made an insurance claim, to tell them how the Government Land Categorisation may affect their ongoing insurance cover.
"The local councils in each area; Te-Matau-a-Māui Hawke’s Bay, Tūranga-nui-a-Kiwa Gisborne, and Tāmaki Makaurau Auckland, are at different stages of consultation and confirmation of land categories. However, customers whose land is considered to be high risk for future flooding or landslip damage and no longer thought to be safe for residential homes – ie Category 3, will receive a voluntary property purchase offer from their local council," says Tippet.
"IAG has made the decision not to offer ongoing insurance for properties in Category 3. Councils have identified Category 3 properties as being at high risk of damage from future weather events and so those residents are being encouraged through this categorisation process to reside elsewhere."
"We want to reassure these customers that cover won’t be cancelled immediately and that we will continue to provide cover until the voluntary sale of the property to the local council is completed, or when the offer expires or is rejected," Tippet says.
He says homes that are a total loss will have cover cancelled as part of the usual claims settlement.
"Customers with properties confirmed in Category 2P or 2C – managed risk, may see changes to their insurance to reflect the risk of damage from future severe weather events, including to the premium and excess. Any changes will be made at the policy’s next renewal and are part of our normal process to evaluate the risk, then determine the terms and conditions for any insurance cover provided, as we do throughout New Zealand," says Tippet.
"While insurance cover for properties in Category 1 won’t change based solely on the category, we will still consider the flood risk and landslip hazards of the property that could impact the premium and the excess. Again, this is part of our normal process to evaluate the ongoing risk of providing insurance."