Westpac and Lumley Insurance have teamed up to write new construction and full replacement home and contents cover in greater Christchurch in a move that has broken a post-earthquake insurance deadlock.
The lack of available insurance has left hundreds in limbo and unable to get on with rebuilding their lives.
Now, Westpac has become the first major financial institution in New Zealand to secure international reinsurance backing, and along with Lumley, help open up the market.
Westpac managing director private, wealth and insurance Simon Power said customer feedback was the driver in persevering with efforts to create the 'Canterbury New Build Pac'.
"We have listened to the frustration and anguish many of our customers have experienced through the lack of available insurance to build a new home and have been determined to find a practical solution," Mr Power said.
"Now, not only do we hope this helps people move on but it also goes some way to opening up the market.
"Dealing with the issues that have arisen from the earthquakes has required thinking outside the square and what we've done here is create an end-to-end solution so people can get out of no man's land and get on with their lives with confidence."
The 'Canterbury New Build Pac' combines a Westpac home loan, transactional account and contract works and home cover. It is for new and existing customers who are ready to start on residential builds or buy new residential builds in Canterbury, and have all appropriate consents but have not progressed due to being unable to secure insurance cover.
Canterbury Earthquake Recovery Minister Gerry Brownlee has welcomed the news as a "vote of confidence" for the city's future.
"Being able to get new cover will help the rebuild gain momentum, and I hope today's announcement spurs other insurers to further unlock the market.
"With the seismic situation stabilising, and the vast amount of geotechnical and seismological work done over the past 24 months, insurers have arguably never been better placed to quantify and price risk."
Contract works cover is for a maximum 12 months and includes protection from natural disasters and earthquakes.
Home cover will be on a 'sum insured' basis meaning customers insure for full replacement, up to the specified value. Sum insured is common overseas and is expected to become the norm here after the earthquakes changed the country's risk profile in the reinsurance market.
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- APNZBy Kurt Bayer @KurtBayerAPNZ Email Kurt