A major insurance company has said it will provide insurance to properties in the capital, provided the level of risk isn’t too high.
It follows the revelation in March that IAG, which insures about half the property market in Wellington, had been declining some new customers for contents and home insurance.
IAG insisted it was not a blanket policy, and has since announced it will move to a risk-based pricing model from July after placing restrictions on taking on new risk following the Kaikōura earthquake.
“After a big event like that, it’s normal practice for insurers to put in place some restrictions on taking on extra risk, that’s just the standard practice and you’ll see that in markets around the world,” IAG executive manager of corporate relations Bryce Davis said.
“When we got to early this year, we started thinking about those restrictions and we saw that the background risk of another large earthquake had kind of gone back to the background level and so we thought it was time to normalise the market – open up the risk.”
He wanted to reiterate that IAG was accepting new customers looking for home and contents insurance in the capital and commercial property as well, with just under 1000 new home and contents policies taken on each month since March.
Mr Davies said that with a few exceptions, IAG would provide residents who apply with contents insurance in the capital.
However, insurance for multi-unit buildings was not guaranteed.
Mr Davies said IAG would “consider” all applications, based on a number of factors.
“So the soil type and the height of the building become much, more important than they do perhaps on a residential home so there are different things that we will look at but what we’re talking about here is the risk that it presents so a decision is always going to turn on those facts,” he said.
“It might be that the price for that insurance might be slightly higher so it’s not a binary of you’re going to get insurance, you’re not – broadly speaking for Wellington as for most high risk locations around New Zealand, insurance is available.
“What we’re seeing the market do – and this is true of international insurance markets as well – is about making sure the price actually reflects the underlying level of risk.”
An insurance forum will be held in Wellington on Monday with mayor Justin Lester, ministers and insurance companies.