2017 'the most expensive year' in insured losses - Insurance Council

Weather, Insurance
More than $174 million was paid out in the first three-and-a-half months of the year. Photo credit: Newshub

This year is forecast to be the most expensive year in insured losses for weather and disaster related events in nearly 50 years, the Insurance Council of New Zealand (ICNZ) says.

Information provided to Newshub shows as of April 16, more than $174 million was paid out to people and businesses, that number is already more than triple the amount of losses for last year.

Weather, Insurance
Floods left parts of Edgecumbe underwater. Photo credit: File

The figures exclude Earthquake Commission (EQC) claims and final numbers are still being counted for Cyclone Cook and Debbie, which ICNZ believes will push the number to more than $200 million.

"The increase in weather losses is because of an increase in weather events causing [the] losses," ICNZ CEO Tim Grafton says.  

"We expect to hit $200 million in insured losses for our members very shortly.

"Economic losses will be a lot higher as we don't record uninsured losses nor insurance that is written offshore."

That number is expected to skyrocket even further with the cost of July's snow, storms and nationwide flooding still to be counted.

Most expensive weather and disaster events in 2017:

  • Cyclone Debbie 3-7 April $66.4m 
  • Tasman Tempest / Upper North Island Flooding 7-12 March $61.7m 
  • Port Hills Fires 13-17 February $18.3m 
  • Cyclone Cook 13-16 April $18m 
  • Nationwide severe weather 18-23 January $8.6m 
  • Dunedin Flooding 13 February $1.7m

April's Cyclone Debbie cost the most for private insurers so far this year, paying out more than $66.4 million from 4600 claims from the four day storm.

Weather, Picton
Rivers struggled to cope with Cyclone Debbie. Photo credit: Stewart Ireland

The most expensive year previously was 1968, costing more than $221 million, the same year as the Wahine ferry disaster, one of New Zealand's worst maritime disasters that claimed 53 lives and cost more than $164 million alone.

Past five years of pay-outs:

  • 2016 - $50.7 million
  • 2015 - $115.4 million
  • 2014 - $150.2 million
  • 2013 - $175.3 million
  • 2012 - $8.7 million
Port Hills, Insurance
The Port Hills fire could be seen from space. Photo credit: Newshub

Mr Grafton says most New Zealanders have some sort of insurance in place.

"Home insurance in New Zealand is relatively static at around 98 percent because most people have mortgages and therefore the banks require the home to be protected," he says.

"Contents insurance is also relatively static but increased slightly in 2017 to 80 percent (up from 78 percent in 2016)"

Despite that, Mr Grafton warns 85 percent of Kiwis may be underinsured, according to Treasury.

"What people don't seem to realise is that they should have their house insured for the costs to re-build, and not the GV or the market value or what they paid for it," he adds.

"If your house is on a slope or in a hard to access area then additional sums insured should be allowed.  We urge people to use the cordell calculator or contract the services of a quantity surveyor."

Provisional data for the July nationwide flooding is expected in September.