NZ - Thousands Could Lose Insurance Due to Climate Change
Tens of thousands of New Zealanders could find themselves living in flood-prone homes without insurance in 30 years' time, Marc Daalder reports
More than 10,000 homes could lose insurance by 2050 due to climate change and just 12 centimetres of sea-level rise could make 1-in-100 year flooding five times more likely in Wellington.
Those are the conclusions of a new report for the Deep South National Science Challenge from researchers at ClimateSigma and Victoria University of Wellington. The report estimates the likelihood of insurance companies pulling out from exposed, coastal properties in the coming decades as sea levels continue to rise.
It found that more than 10,000 coastal properties in Auckland, Wellington, Christchurch and Dunedin which currently have a 1 percent Annual Exceedance Probability (AEP) - they are exposed to 1-in-100 year floods - will reach 5 percent AEP (1-in-20 year floods) in less than three decades.
Anecdotal evidence indicates insurers begin to pull out when properties reach a 2 percent AEP threshold (1-in-50 year floods). Termed "partial retreat" by the researchers, this involves transferring risk back to the property holder through caps on coverage, excesses for specific hazards or just excluding specific hazards (like flooding) from insurance altogether.