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Coastal homes may miss out on insurance
By SOPHIE HAZELHURST - NZPA | Thursday, 12 April 2007

Property buyers looking for that perfect coastal residence may struggle against more than soaring house prices as insurance companies warn they may refuse to cover them for extreme weather risks linked to global warming.

Without insurance in flood and erosion-risk areas, buyers may find it impossible to get mortgages.

Insurance Council chief executive Chris Ryan said the United Nation's Intergovernmental Panel on Climate Change (IPCC) final draft report released this week had noted coastal properties could become uninsurable, as extreme weather heightens risk of flood and storm damage.

The report predicted more extreme weather for New Zealand as the Earth heats up.

The report said water security, natural ecosystems and coastal communities were the three sectors most at risk from climate change in New Zealand.

Mr Ryan said there were already some individual properties in New Zealand that insurance companies had refused to cover if they did not put flood protective measures in place.

Refusals were likely to increase over the next 10 to 15 years.

Mr Ryan said the problem of growing risk from climate change was effectively doubled when combined with the soaring values of coastal properties.

"The risks are that insurers have been watching the impact of climate change on New Zealand as a coastal nation at the same time as they've been watching the increased value of houses on the coast and the increased numbers of people building houses and living on the coast," he said.

"When you put those together, at a certain point the insurers are going to say, you must be much more aware of the risk you're carrying when you buy your dream house on the coastal area.

"You can't assume you will always have insurance."

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