Flooding exposes lack of insurance

Hundreds of insurance claims are pouring in as flood-hit parts of New Zealand pick up the pieces. But up to a third of the affected population may have no contents insurance.

The Bay of Plenty town of Edgecumbe is now largely under water in what has been described as a one-in-500-year flood.

Jimmy Higgins, executive general manager of claims at Suncorp, which operates insurance firm Vero in New Zealand, said it had received 300 claims by yesterday morning.

He said it was too early to say how much the bill for fixing the flood damage might be.

‘‘For areas affected by flooding, including Edgecumbe, we will be ready to get into homes as soon as the flooding subsides, and to help our customers who have been affected by the remnants of Cyclone Debbie. In many cases customers will be covered for alternative accommodation, if it is required.’’

A spokeswoman for IAG, which operates brands including State and AMI, said 250 storm-related claims had already been lodged.

’’As anticipated the geographic spread of claims as broadened consistent with the path of ex-cyclone Debbie. The majority of claims received are from the Auckland region, followed by Central North Island, Lower North Island and South Island.’’

Insurance Council chief executive Tim Grafton said it would be six weeks before the scale of insured losses would be. ‘‘This is in a very early stage. This event is still going through Christchurch at the moment.’’

But he said it was safe to expect a third to a quarter of the population would not have any contents insurance to cover their damage. Most houses would be covered, he said.

People without contents cover were predominantly younger and lower-income households.

‘‘Often they respond to a disaster situation by looking to extended family for financial support to get through ... but they have less means to provide support than an insurance policy might have been able to provide,’’ Grafton said.

When Matata was hit by floods in 2005, many people were left significantly out of pocket because they did not have insurance. .