The country is experiencing another destructive extreme weather event, with flooding causing havoc across the country. It's costing insurance companies millions, which may just be passed onto consumers.
But experts have found a way to avoid flooding damage and hefty insurance bills in the process - but it may be too good to be true.
Speaking to The Project, Climate Sigma managing director Belinda Storey said rather than the Government stepping in to save those in high-risk areas during extreme weather events, we should be encouraging people to move out of those areas.
While moving tens of thousands of people out of their homes may sound impossible, it is a necessary step to get people out of mother nature's way.
In the last 10 years alone the country has seen 10 major floods, with the same areas repetitively hit.
IAG claims on storms in the last 12 months reached $147 million and Storey said insurers are continuing to provide cross-subsidisation, meaning people living in less hazardous areas are likely to be paying higher premiums to subsidise those living in high-risk locations.
She said if a location loses insurance because a private insurer has pulled out, it means the risk to their home is getting really high.
But she said if the Government steps in and provides public insurance or spends millions on flood walls, it means residents are encouraged to remain in place while their risk keeps increasing.
"What that means is no matter how well insured you are, you can end up facing a risk to life, but insurance isn't going to protect you from that risk to life," Storey said. "So if we step in and provide public insurance in hazardous locations, we'll have more and more people staying in harm's way."
IAG NZ CEO Amanda Whiting said the highest flood risk areas are spread right throughout New Zealand, but the most severe risks only affect about one percent of households.
Insurance company IAG is also calling for people to stop building in flood-prone areas or face being uninsurable.
"We need to think about how we adapt and how we take opportunities to move people out of that danger area," Whiting told The Project.
Storey said we need to provide support for people to move out of hazardous areas and have conversations so that residents understand there is a time limit on those locations because of climate change.
While it may be expensive to do, it will save money in the long run.
"We can either pay after a disaster or we can pay before a disaster, when people's lives have been at risk, and before we have built way more assets in harm's way."
