Mark Simmonds who, with his wife Bronwyn Paul, runs a wedding and event venue in a renovated Edwardian building in Wanganui, can no longer get insurance cover for earthquake damage.
After the Canterbury earthquakes, their insurance premiums tripled in one year from $23,000 to $72,000. Now they cannot get earthquake cover and while the premium has been reduced to reflect that, they are still paying $40,000.
The couple are like thousands of business owners: at the mercy of insurance companies and brokers to insure old commercial buildings.
Rising insurance costs and prohibitive repair bills to strengthen earthquake-prone buildings have the potential to change the face of character areas, such as Kingsland, Ponsonby and Mt Eden in Auckland; and many provincial town centres, like Wanganui.
The Government is proposing seismic assessment of all commercial and high-rise, multi-unit buildings - believed to be 193,000 properties. The focus will be on buildings built before 1976.
Those not upgraded to withstand a moderate-sized earthquake within 10 years of assessment would have to be demolished. It is estimated between 15,000 and 25,000 buildings will have to be strengthened or demolished, and this number could rise.
Mr Simmonds and Ms Paul bought the former Wanganui Gentlemen's Club in 2010 and poured their hearts - and $300,000 - into refurbishing the grand, two-storey brick and tile building.
Before buying the building, they hired a structural engineer who found nothing wrong. Not a single brick was cracked.
"When the earthquakes came the ball game changed completely. You are talking the plague," said Mr Simmonds, who has been quoted $1.3 million to strengthen the building.
"It's putting huge stress and pressure on people like us. If we walk away from it, no one else will pick it up," he said.
In Auckland, insurance premiums on the Dominion Bar, housed in a two-storey character brick building on the corner of Dominion and Valley Rds, have increased 13 per cent in the past year, according to the managing director of Barworks, John Hellebrekers.
He said the increased insurance premiums and building requirements impacted the bar's bottom-line profitability.
James McGhie, managing director of broker firm Apex General, said any pre-1935 commercial building was going to face big increases if they hadn't already started to see them.
"Anything built before 1960 will also see big increases. That is across the board - no exceptions," he said.
Mr McGhie said the rises would be nationwide but suburbs with older timber buildings - a higher fire risk - would be hardest hit. Brick buildings on reclaimed land such as the Britomart area in Auckland and Lambton Quay in Wellington were also vulnerable.
It is expected building owners in those areas will have to provide more information - such as survey results, geotech reports and earthquake strengthening reports - than previously expected.
The Wanganui District Council last year saw a 15 per cent rise in insurance premiums on the 17 earthquake-prone buildings it owns and introduced a 0.5 per cent levy that will net $20 million over 10 years to go towards strengthening.
Unlike the Wanganui council, Auckland Council will not say how many council buildings are earthquake-prone, although risk and assurance director Natalie Verdouw said higher insurance premiums were not specific to earthquake-prone issues.
"Insurance premiums have increased but this is a global trend based on repeated natural disasters around the globe and the impact these have had on many large insurers," she said.
The Government's timeframe to strengthen or demolish a quake-prone building within 10 years of assessment is much shorter than the 20 to 30 years proposed by the Auckland Council.
A spokeswoman for Vero said the insurer took into account a number of features for old commercial buildings when assessing premiums, including the age of the building, construction type, land conditions and zoning implications.
She said the Building Act defined buildings less than 34 per cent of new building standard as "earthquake-prone" and required councils to have a policy towards managing them.
"Where we are aware that the building is less than 34 per cent of the new building standard, we will take a more conservative approach in both risk acceptance and pricing.
"Depending on the specific characteristics of the risks, options could vary from offering indemnity cover only or restricted cover to no cover. We will not be able to offer full cover if a building is less than 34 per cent of the new building standard," the spokeswoman said.
Vero expected owners to tell them if their building had been notified as earthquake-prone and took this into account when assessing premiums, the spokesman said.
An NZI spokesman said it was not commercially prudent to sustain cover for earthquake-prone buildings under current terms, but its approach was to look at each case individually.
Likely changes included moving to indemnity cover - the value of the building at the time of loss - and excluding seismic upgrade costs from cover, the spokesman said.
Bob de Leur, who oversees Auckland Council's current list of 4300 potential earthquake-prone buildings, said the council did not share the list with insurance companies.
Insurance Council chief executive Chris Ryan said earthquakes were now a clearly defined risk for insurance in this country.
Insurance for earthquake-prone buildings, he said, had become more site-specific to take into account different risks, such as reclaimed land and land prone to liquefaction, and low seismic risk areas such as Auckland would have much lower premium increases than higher risk areas such as Wellington.
The Government proposals on seismic strengthening are in response to the Canterbury Earthquake Royal Commission report on earthquake-prone buildings. Submissions close on Friday.
Monday: The Government's big plan
Yesterday: Plight of landlords
Today: The insurance issue
Thursday: What future for our heritage buildings?
Friday: How will tomorrow's buildings look and respond to earthquakes?
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