Battered insurers sound warning

MOTHER NATURE has had quite a party in Wellington this year, inflicting drought, deluges, quakes, and – in case you missed it – wind.

Insurers, facing their most costly year in almost a decade, say premiums may rise and some areas may lose insurance if action is not taken.

After a summer drought that was the worst in nearly 70 years, in May, 107.6 millimetres of rain fell in Wellington in 24 hours, flooding homes and businesses, and sparking about 400 callouts to the city council.

Provisional national Insurance Council figures show the two big quakes, on July 21 and August 16, cost insurers $24.2 million, and the June storms cost $33m, while the May floods had a final cost of $2.9m.

Council chief executive Tim Grafton said 2013 was shaping up to cost insurers more than $100m in storm cover, making it the most costly since 2004, which was a year of big floods in the lower North Island.

‘‘[Monday’s] storm will not result in an increase in premiums but, if New Zealand doesn’t adapt to changing climate conditions, there will be increased claims and higher losses leading to higher premiums or even cover being withdrawn in some areas,’’ Mr Grafton said.

He urged greater ‘‘community resilience’’ and research around major weather events.

The Government recently announced spending of $201m over 10 years on research into resilience to natural hazards, a move applauded by the council.

Wellington Regional Emergency Management Office head Bruce Pepperell said ‘‘it would be fair to say we have had more than our share’’ of natural events this year.

The good news was that Wellingtonians were better prepared than anyone else in New Zealand for natural disasters, even