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According to Consumer NZ, more New Zealand property owners may be forced to go without home insurance as premiums continue to rise.
A consumer advocate raised concerns after finding that half of respondents were worried about the cost of insuring their homes.
The survey also found that 7% did not have home insurance or did not renew their policy due to cost; For those without contents insurance, 17% did not renew for the same reason.
“Insurance provides an important safety net,” said Rebecca Stiles, head of Consumer NZ Research.
“As the cost of living squeezes many families, some New Zealanders are effectively priced out of insurance coverage.”
Consumer NZ says CPI data shows the cost of home and contents insurance has increased by 150% in the past 10 years.
Property owners in Hamilton have been hit hardest, with premiums for standard-sized homes up 17% over last year. Premiums rose 15% in Auckland and 15% in Dunedin over the past year.
The Insurance Council of New Zealand says inflation is a challenge everyone, including the industry, is trying to manage at the moment.
“While each individual insurer must set their own premiums, the industry understands the cost pressures everyone faces,” a spokesperson told insuranceNEWS.com.au.
“In reality, all insurers are seeing the same price pressures because they are insuring products that are becoming increasingly expensive.”
Other industry and customer-facing interventions have included ongoing supply chain issues, which have led to people leaving their homes for longer periods of time when repairs are needed, and have resulted in higher temporary accommodation costs for insurers, the spokesman said.
A tight reinsurance market and a rising trend in extreme weather-related claim costs are adding to cost pressures.
The Earthquake Commission (EQC) levy – which, from October 1, insurers must collect – has risen to a maximum of $NZ552 ($519) from $NZ345 ($324) previously, the spokesperson points out.
Consumer NZ says the increased levy has not led to lower premiums, contrary to previous government views that insurance costs would fall as the state takes on more risk. The levy was raised to cover the higher building sum from $NZ150,000 ($141,282) to $NZ300,000 ($282,564).
“We found that average costs have increased by 5% to 17% since this time last year,” Ms Style said.
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