Without action 'it's entirely possible' many New Zealanders won't be able to access insurance at all by 2035, author of Consumer NZ report looking at climate change and insurance says

“After the Christchurch earthquakes and insurance companies raising their premiums to cover their losses from the earthquake, I decided to avoid the eye gouging behaviour of big international companies and have not had any insurance since.”

That’s what one person told Consumer NZ research team leader Rebecca Styles.

Styles, who has written a report called Will you be able to get home insurance by 2035?, says that’s what stood out to her when researching how climate change is affecting the cost and availability of house and contents insurance in Aotearoa.

Because, this person is not alone. A growing number of New Zealanders are ditching their insurance because of the cost.

“They’re putting their main assets, their financial future at risk … I was a bit scared that people don’t quite realise what they’re going without and all the potential financial harm that could come from not having insurance.”

“If insurance becomes a luxury only available to a privileged few, the impacts on communities, our economy and society will be severe,” Styles says.

That’s why Consumer NZ is calling for action. Some of the things the consumer advocacy group wants to see is leadership when it comes to the climate adaptation framework.

It also wants the Commerce Commission to look at competition in the house insurance sector and whether it’s working for people. Additionally Consumer NZ wants the Financial Markets Authority to look at risk-based pricing and whether it has been applied fairly with the best interests of consumers at heart, Styles says.

“If we don’t act now, it’s entirely possible that many New Zealanders won’t be able to get insurance at all by 2035.”

Alongside this, academics who specialise in insurance and its connection to climate say in the report the country has until 2040 before we start to see some insurers exiting Aotearoa. They also suggest some of the country’s main centres could see insurance retreat by the end of the decade.

“We need a plan, and we need to start implementing that plan now,” Styles says.

A 916% increase 

In the report, Styles spoke to homeowners, insurance representatives and academics about the issues, exploring topics such as consumer experiences, the increasing cost of insurance, climate adaptation, local authorities, the Natural Hazards Commission and growing inequity.

Looking at data from Statistics New Zealand, the report says since 2000, the price of house insurance has increased 916%.

“That’s the greatest increase in price for all goods monitored by the Consumers Price Index in the past 25 years.”

The report says Statistics NZ data shows insurance costs tracking up in 2011, 2017, and once more from 2022 to 2023. These years mark major natural disasters - the Christchurch earthquakes, the Auckland Anniversary floods and Cyclone Gabrielle.

The report also found homeowners were increasing their excesses in an effort to bring down their premiums which could potentially shift their excesses to “unaffordable levels”.

In 2022, Consumer NZ research found 7% of people surveyed had dropped house insurance due to cost. This jumped to 17% in 2025.

When it came to ditching contents insurance, 23% of those surveyed in 2025 had dropped it because of the cost.

While there’s still a high uptake of house insurance, the report says it’s concerning people are making the decision to go without house insurance.

“Without house insurance, owners aren’t eligible for natural hazards cover in the case of a natural disaster, which makes it a huge financial risk.”

Transparency

The report also found consumers have a lack of trust in the insurance industry and there was a lack of transparency when it comes to risk-based pricing and difficulties shopping around.

There was a “general feeling that the claims process isn’t as smooth as insurance companies would like us to believe”, the report says.

Challenging an insurer’s premium increases was also a struggle for people.

In the report, Styles speaks to Labour’s Christchurch Central MP Duncan Webb - a former law professor and former Minister of Commerce and Consumer Affairs - who developed an interest in insurance following the Christchurch earthquakes.

Webb says there’s no avenue for people to contest insurance costs and while insurers are using “sophisticated modelling now”, he doesn’t know if the modelling is true or not.

“If … your insurer says, for Wellington, we’ve done all the modelling, everyone’s premiums are going up by 5% as a result … plus inflation and the model’s wrong, then there’s a problem there: it’s overpricing. But there’s no real way to challenge that.”

While insurers offered some general information about this, the report says there was a “reluctance” with many saying they couldn’t or don’t share natural hazards data with customers due to it being commercially sensitive.

The report asks: “Given the rise in risk-based pricing, how do customers know their insurer is using the right data to calculate their property’s risk and hence the premium price? At what point does a customer’s right to know override commercial interests?”

“Should customers be able to challenge the data insurers use? Do we need more transparency and is that something the insurance industry supports?”

There’s potential for more transparency in the future and that should come out of the Government’s climate adaptation framework plans, says chief executive of the Insurance Council of New Zealand - Te Kāhui Inihua o Aotearoa (ICNZ) Kris Faafoi in the report.

“But the insurer spends a considerable amount of money to get some of the data and obviously that’s commercial information that they want to keep tight to have a competitive advantage.”

Climate change

Consumer NZ is calling for strong government leadership when it comes to the climate adaptation framework.

It wants the Government to develop “effective climate adaptation legislation” with cross-party consensus that’s supported by an “effective” national framework that outlines how climate risks will be assessed, managed and paid for.

Styles says if there's another extreme weather event this year or the next, insurance prices will rise in response so it will just keep going up and up until a climate adaptation framework is in place.

Once that's in place, the country could start adapting and moving people out of harm’s way, she says.

“If we don’t have government leadership on that, it could happen that people can’t afford insurance.”

While ongoing calls have been made for New Zealand to make urgent and critical changes when it comes to managing climate change and natural hazards, there are also ongoing questions around who will pay for these climate adaptation measures.

The Independent Reference Group (IRG) - a group put together by the Ministry for the Environment shared its recommendations for the country’s climate adaptation framework in July.

One of its recommendations included putting the onus on people to know the risks that come with their properties and to make their own decisions. The IRG also said people should not expect buyouts.

While in the past central and local governments have offered buyouts, IRG's feedback was; “these decisions reduce incentives for people to understand and manage their own risk, can distort property prices, and have given rise to an expectation that buy outs will continue, creating a moral hazard”.

Consumer NZ’s report found it interesting that IRG is advocating for individual responsibility over a shared response to climate change.

“From our surveying, there is a clear sentiment among consumers that costs need to be shared between all parties - insurers, central and local government, and property owners.”

The report says if a cost-effective and credible climate change adaptation framework isn’t in place, and the country continues to experience severe weather events, “insurers could decide to leave Aotearoa because the risk of providing coverage becomes too great”.

“We cannot afford to be complacent.”

A looming economic crisis

If house insurance was no longer available, the report says the “knock-on effects could create a financial crisis similar to the 2008 global financial crisis - without the recovery”.

“Although homeowners recovered from that global financial crisis, there will be no recovery from the impacts of climate change.”

And if people choose to drop house and contents insurance because it’s too expensive for them, insurance would become more expensive for the consumers still buying it “as the collective premium pool that insurers collect from reduces”, the report says.

Feeling hopeful

“People have been looking at the climate adaptation framework and a lot of research has been done,” Styles says.

“We just need a decision and leadership from the Government to put it in place and get the ball rolling. I think once that’s rolling and we have some reassurance on what the hazard based data insurer are using to charge us, I think that will help rebuild trust.

“And if we can give local councils the resourcing and expertise to help to stop building in more at-risk places, I think all these things will help us keep insurance here and keep it affordable.”

“Despair is not going to get us anywhere,” Styles says.