Napier homeowners have seen their insurance premiums more than triple since Cyclone Gabrielle swept the province in early 2023. Photo: RNZ / Niva Chittock
A Napier man who got his insurance premiums reduced after he challenged a council flooding hazard map is calling for greater transparency on where insurers get their information from.
Philip Dol said premiums for his house in the suburb of Te Arawa went up from $2000 a year to more than $5000 after Cyclone Gabrielle. His latest premiums were quoted at just shy of $8000.
Dol - who has experience in the engineering sector - was able to work out the Hawke's Bay Regional Council had not included key information about his property, which had been elevated to a higher level than a neighbouring suburb, in its hazard maps.
He told Nine to Noon's Kathryn Ryan that his home premiums had been stable for many years before Cyclone Gabrielle, when they had "quite a substantial increase".
"That led me to think - where to from here? It's $8000 now. Is it $10,000 next year? And where does this stop?"
Dol said he contacted his insurers, asking how the premiums had been calculated.
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The insurer told Dol his property was in a high-risk area for flooding, and new mapping had shown it was also at risk of coastal inundation.
But when he examined the maps, Dol noticed only a small portion of his driveway was in the high-risk zone.
"I live on a small cul-de-sac, so there was many, many houses that were affected by a very small portion of their property, and that got me thinking, that can't be right."
The local council required properties in new subdivisions to have a raft of mitigations around seismic, geological and landslide risks, he said.
In addition, Dol had taken extra precautions for his own property - raising his foundations and adding a large stormwater sump - and presented this to the insurer.
When challenged, the insurer said Dol should contact the regional council to change the maps, in which case they would review the premium.
As a result, the newly developed area in which Dol lived was taken off the flood hazard maps, as were more than 200 homes and retirement units in a nearby subdivision.
Not satisfied, Dol pressed further - and the insurer reduced his premium by $880.
Dol said there needed to be greater transparency for all consumers about the information insurers were using to make decisions about premiums.
"I find it really hard as a ratepayer to understand that through infrastructure investment - or potential lack of, through the years - that we're getting a double whammy. We're getting insurance premiums increased, as well as our rates increased to pay for those investments.
"There's a lot of people out there struggling financially with all these bills going up and working really hard ... to get ahead. [With] some of these pressures, it dawned on me, OK I need to take a stand here and get some answers."
Dol accepted insurers were under pressure with the added financial risks of climate change, but the mapping and data they based premiums on needed to be accurate, he said.
"If you're increasing someone's premiums by double, what are they actually getting for that? Because two years ago I was getting the same service ... that I am now, so what's changed for that extra money we've been charged?"
Kathryn Ryan asked Dol if the issue was that different councils were responsible for hazard mapping and building consents, and whether that information was readily available.
"Absolutely. It needs to be totally up to date," Dol said.
It was unclear whether other properties in his subdivision would be eligible for premium discounts, he said.
"There's no real clarity here... I was getting nowhere with my insurer and that's why I decided to band together because if more voices are talking, and pushing, you usually get an outcome."
The 200 houses were likely to be "the tip of the iceberg" around New Zealand, he said.
Insurance and Financial Services Ombudsman Karen Stevens told Nine to Noon Dol's situation was part of a wider issue of the data behind insurers' decisions.
Consumers had the power to challenge insurance premium increases arising from natural hazard mapping, she said.
The Natural Hazards Commission - which took over from the Earthquake Commission on 1 July - had a portal showing every area in New Zealand and the hazards they faced.
But not all of that information was up to date, she said.
"It's not just about earthquakes; it's about landslips, it's about volcanic activity, tsunami, storm inundations - all of these things now are being regarded as high risk."
The Canterbury earthquakes were the trigger for such risk-based pricing, and subsequent natural disasters had also led to increased premiums, she said.
"We know it's a big issue because we get a lot of people coming to us with that complaint."
So who was to blame for the inaccurate mapping: regional councils or insurers? And whose information should be used to set premiums?
Premiums were historically based on individual factors, such as home renovations - or lack thereof, Stevens said.
That had changed with climate change, however, and insurers now relied on a raft of information, including local body mapping.
But this could be challenged, she said.
"The start is for all consumers to understand their risk and look at what is now on the natural hazards site.... It's all colour and it's just laid across a map, and doesn't take into consideration individual risk mitigations.
"If you know you don't have a hill [at risk of landslips] behind you, but you're still a pink or an orange, it's time to actually stand up and say something, and take the same action that Phil has taken."
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