Insurers brace for weather claims
Insurers are bracing for another big year of weather-related claims.
Wild weather is battering parts of the country, with high winds and flooding prompting insurers to brace for calls from homeowners with damaged homes and vehicles.
‘‘The cost of extreme weather events is just going up and up. We have just had a record year for insured losses, which exceeded the previous year,’’ said Tim Grafton, chief executive of the Insurance Council of New Zealand Te Kā hui Inihua o Aotearoa.
‘‘Currently we are on track, and who knows what the next months will show, for another very big year of losses,’’ he said.
Total weather-related insurance costs reached a record high in 2021 at $322 million, ICNZ said, beating the
2020 record of $274m.
ICNZ’s online natural disaster tracker shows that in the first five months of the year, insurers faced three major weather-related events that will cost them an estimated $143m.
It’s not only the trend for an increasing number of extreme weather events that was setting a new record each year.
The cost of used cars, and the cost of building new homes has skyrocketed in the past 12 months, meaning the cost of settling each claim had risen dramatically.
‘‘Building inflation has gone up by about 18%,’’ Grafton said.
The costs calculated by insurers painted only part of the picture, as extreme weather events caused damage to things that were not insured, which could add as much as 40% or more to the real costs to
property-owners, ICNZ estimates.
The tornado in Levin on May 20 looks set to cost insurers over $8m, data from ICNZ shows. The March floods in the North Island would cost insurers more than $80m. February‘s Cyclone Dovi resulted in claims costs of about $55m.
In April insurer IAG, which owns the State, NZI and AMI brands, launched its ‘‘wild weather tracker’’ newsletter, which it intends to publish regularly.
The insurer also set up an online disaster hub for its customers seeking advice, and making claims, as a result of wild weather, or other natural disasters.
In the first of the newsletters, issued in April, Amanda Whiting, IAG’s chief executive said: ‘‘We see first-hand the impact of climate change through changing weather patterns on our communities.
‘‘We know that New Zealand’s weather can be unpredictable, but our claims data clearly shows that severe weather is becoming more frequent and more damaging to people’s homes and property. We expect that these events will only increase as our climate warms.’’
Advice from IAG to homeowners suffering flood damage:
Do not do anything that puts yourself at risk. Ensure you and your whānau are safe first. There is no hurry to make a claim, but as soon as you’re able to let your insurer know about any damage to your property, the sooner it can help, especially if your home becomes uninhabitable, or your insurer need to arrange temporary accommodation for you, your family and your pets.
Be careful not to return to your home or business until it’s safe to do so and avoid anything that could potentially cause more damage.
If your roof has been damaged by strong winds, hail, or debris, please don’t risk your safety trying to inspect or repair the damage, but please let your insurer know if you need it to arrange urgent repairs to make your home or business watertight and safe.
It’s OK to start to clean up if you’ve been affected by flooding, especially if it can prevent further damage, but remember it’s best to treat all flood water as blackwater (i.e., contaminated with sewerage), so make sure you stay safe by wearing heavy duty gloves, boots and a face mask.
Most items can be repaired, cleaned and/or sanitised, and moving items outside can help dry them out. Try to keep them under cover or put them in your garage with plenty of ventilation to prevent further damage.
If your vehicle’s windscreen has been damaged or your car has been flooded, please don’t attempt to drive it.
Check whether you have cover for a temporary vehicle.
If your vehicle needs to be towed, remove any personal items if you can, and make sure it’s locked with no keys inside. The tow team will get in touch to pick your keys up instead.
If you have contents insurance, let your insurer know if items in your car were damaged.