New research finds the average property that's claimed EQC cover for storm damage is twice as close to the coast as the average property in NZ

The NZHerald is running this story also, including comments from the Insurance Council and IAG.
Can't help but feeling that this is a general softening up of the public to accept the increases the insurance companies are pushing through for higher risk properties.
Research that states the obvious is official confirmation of facts long known.
That a house in a high risk area is facing increased premium costs seems fair to all and it gives incentives to build in lower risk areas.
Perhaps we should hold councils responsible for allowing subdivisions on land not suitable for building on, other than that it increases council revenue through building consents and rates for ever after.
But the irony of that will be that the councils will take out insurance for that and guess who ends up paying the premium.
As we all know an elected council is "only" doing what the electorate "wants" which is another way of saying "nobody can hold me responsible".
We need common sense in a huge dose.

For insurance there are a number of factors that need to be considered and i struggle to understand why the insurance industry has not already been all over this. Proximity to coastal and waterway areas, height above them, proximity to unstable cliffs/hill sides and so on. Thinking about it - these are likely the highest value properties as they will be built on the prime coastal areas that command the best prices in most areas. The evidence of global warming's impact on weather events has been reasonably clear for a year or so now, unless you're implacably in denial and totally resistant to change. So those people who own those properties should be paying increased risk premiums rather than expecting them to be subsidised by every one else.

Ocean Beach drive, at the foot of Mt Maunganui comes to mind ...

"The evidence of global warming's impact on weather events has been reasonably clear for a year or so now, unless you're implacably in denial and totally resistant to change." Actually it has been clear for at least two decades. One could perhaps add the word "reasonably" to maybe three or so decades ago.

Cui bono? The insurance premium elevation crew, assuredly.

And one cannot help chuckling at the article's use of this 'statistic': "the average property in New Zealand is located about 11km away from the coast"

That's certainly not true for (let's enumerate 'em):

1. Dunedin (probably 80% within that 11km line)
2. Christchurch ditto, where even the airport is only 15k from our beach
3. Wellington ditto
4. Napier - 11km out and yer in the Vineyards...
5. New Plymouth
6. Tauranga
7. Auckland maybe 80% within that line

With such sloppy use of 'statistics', the credibility of the entire report is, shall we say, negligible.

But we can certainly all look forward to premium increases on the strength of it.

Risk factors are associated with most insurance, for example in car insurance past claims history, driving offences, and age of driver in relation are considered risk factors.
Equally there is some rationale to looking at high risk areas for property; however, the reality is that the situation is a lot more complex than a analysis as has been carried out using simple and very short term data.
An example of this is that prior to 2010 Christchurch would have been considered a very low risk earthquake zone compared to say Wellington, Hawkes Bay and West Coast which are are all very close to significant faultlines.
Equally, simply being on coast front is not necessarily present the same risk factor for all. Clearly the topography - location on active cliff front, sheltered beach, open beach, inlet - all present different risk factors. Here in the Hawkes Bay, as with most other coastal areas, some beach front properties are located on beaches prone to long term erosion whist other accretion.
If we are after properties carrying their true risk factor, then rather than bland "coastal high, inland cheap" there needs to be individual risk assessment. After all, while that property in Te Kuiti may not be prone to tsunami risk, landslip is significant; equally while Auckland is lowish earthquake risk, it is at higher volcanic and tropical cyclone risk than the South Island.

Climate modelers are now openly reporting the possibility of world sea levels rising 2.5 meters by 2100 which is within the lifetime of current infants. Within only the last five years there has been a rtaher sudden increase in ice melt in Antarctica. So such extreme scenarios are becoming ever more probable. That dangerous word exponentials is becoming ever more present. Rising seas must also raise rivers thus coastlines are not our only concerns. We WILL be increasingly protecting our flood plains at tax/ratepayer expense. The easiest and cheapest source of access to expert advice is Youtube, Professor Jennifer Francis provides a good start.

Well this is going to increase the coast of living...

printer8. CHCH was never considered a 'very low EQ risk'. Its proximity to the alpine fault combined with the significant value at risk in the city, made it a key exposure for insurers before the latest EQ sequence.

Premium rates have not historically been directly correlated to actual risk for a variety of reasons, including that a significant chunk of the end premium is a pass through of the cost of reinsurance. The process to allocate that cost at a granular policy level is influenced by commercial expediency and is not an exact science. Insurers are moving towards individual risk based pricing but cross subsidisation on a location basis will continue.

printer8. Re your obviously correct comment about the South Island being less exposed to tropical weather systems; Canterbury is however still subject to these systems and with weather patterns changing will be more so in future. Christchurch particularly, with wide areas of flood vulnerable land in the eastern suburbs having sunk in the EQ. The devastating flood of 1883 is now thought to have been a cyclone and Cyclone Giselle, otherwise known as the Wahine storm, did significant damage down south.

The bottom line to all this debate is that is that all regions of New Zealand are subject to risks associated with natural hazards.
However, the issue for insurance purposes is that compared to car or fire insurance is that damage from most natural hazard events tends to be far more wide spread, but significant events are less frequent and the return expectancy is longer, and exact timing unpredictable.
A classic example of this would be an eruption of Taupo; a return period is something like 20,000 years but the consequences would be decimation of much of the central North Island making the region inhabitable for a considerable period.

It looks as tho this is a system designed for middle- and low-income Kiwis buying safe houses to subsidise high income Kiwis buying risky property.

Tell me it isn't so. Please.

It looks as tho this is a system designed for middle- and low-income Kiwis buying safe houses to subsidise high income Kiwis buying risky property.

Tell me it isn't so. Please.

Answer is that no, it's not a system 'designed' to do that, it is however a partly unavoidable outcome, which is gradually changing as insurers move more to location based risk pricing but which, in the opinion of this humble scribbler, will to some extent remain the case for some time to come.

Try to think about it in a positive way. Next time you are at Pauanui look on a canal mcmansion and feel joy that you are through paying your insurance premiums, helping to maintain such an impressive symbol of capitalism.

This research does not appear credible: In the context of weather events like flooding and wind only the distance from the coast appears to have been taken into account. For example, properties situated higher than neighbouring sea, lake or river levels however are not flood prone. If insurance premiums are to reflect all actual risks accurately, then ALL factors must be taken into account to include AND exclude risks. For example, how many insurance premiums in Wellington's hilly suburbs contain a flood risk portion, when many can never get flooded? If getting into detailed risk assessment, then DO the details right!