Waterfront homes sell despite rising tides

Insurers are warning New Zealand coastal property owners that premiums will have to rise prohibitively.

As daylight revealed thousands of coastal Florida homes flattened by Hurricane Michael, Insurance Council chief executive Tim Grafton reinforced the industry’s concerns about Kiwis’ love of waterfront living.

Insurance company policies would be shaped by the predictability of flooding. ‘‘We have lots of people who like to live as close to the sea as possible,’’ Grafton said. ‘‘There are literally billions of dollars’ worth of properties within 1.5 metres of the mean high tide.’’

The probability and severity of loss acted as an indicator of higher insurance risk, he said. ‘‘So if the risk goes up then either the property owner has a higher excess or premiums will go up or a combination of the two.’’

The inevitable sea-level rises coming with climate change would affect more and more properties, he said.

Customers in areas at higher risk of natural hazards such as earthquakes, floods and landslips, are expected to see a $91 average increase in their total yearly premium, Radio NZ reported.

IAG – which has the AMI and State Insurance brands – said residents of Whakata¯ne, Hawke’s Bay, Wairarapa, Marlborough, Kaiko¯ura, the West Coast and Dunedin would pay higher premiums to reflect the higher risk.

Local Government New Zealand recently held a conference devoted specifically to low-lying areas and the issues those communities faced.

But Real Estate Institute Taranaki spokesman Garry Malcolm said climate change threats were not putting buyers off beachfront properties. ‘‘That’s the Kiwi way of life.’’