Overseas-backed insurers step in

Wellingtonians who are declined insurance cover by companies such as IAG may have to follow the example of some Christchurch homeowners, real estate agents and insurance brokers say.

Insurance broker Stewart Rankin, of Amicus, said insurers were reassessing Wellington because of the recent earthquakes and how it fitted their risk and exposure in New Zealand.

‘‘They are concerned about geographical spread and the risk. Remember what happened to AMI in 2011 when it had a huge amount of risk in the Canterbury market,’’ he said.

AMI collapsed under the weight of earthquake-related insurance claims and was sold to IAG, excluding the earthquake liabilities which fell to the government.

‘‘The insurance market is also cyclical and a rise in premium prices creates renewed interest from overseas reinsurers who will see greater opportunity eventually,’’ Rankin said.

There were alternatives as new overseas-backed insurers came into the market or Lloyds-backed syndicates provided cover – generally for higher risk properties at higher cost.

Some of them with New Zealand offices included Youi, and Ando backed by Hollard and Lloyds, while Rosser was another overseas underwriter.

Christchurch real estate agent Heather Chick said people had to shop around.

‘‘Insurance is available from overseas, although prices are slightly higher.’’

Some house sales had fallen through because of difficulties obtaining insurance, especially when vendors had failed to keep receipts of work, and were in liquefactionprone areas, Chick said.

An adviser at The Mortgage Girls, Elyce Maxwell, said city council flood zoning had become a bigger issue in Christchurch recently compared with the earthquake risk of five years ago.

‘‘A lot of people are getting access to overseas insurers through their brokers. Generally we can find some insurance.

‘‘But you have to provide builder’s and engineer’s reports. You can’t expect to just sign over to an existing provider when you buy. A lot of people think it will be easier than it is,’’ Maxwell said.

IAG’s recent announcements about becoming more choosy over accepting policies from new Wellington clients follows warnings that customers in areas at higher risk of natural hazards would be hit with average increases in their premiums of $91 from its subsidiary brands AMI and State.

Those areas include parts of Whakata¯ ne district, Hawke’s Bay, Wairarapa, Greater Wellington, Marlborough, the West Coast, Kaiko¯ ura, Waimakariri district and Dunedin.