Hyatt Park Hotel on Halsey Street, Auckland Viaduct, lifting the roof truss onto the hotel construction July 2018.
Hyatt Park Hotel on Halsey Street, Auckland Viaduct, lifting the roof truss onto the hotel construction July 2018.
Hazardous construction on the waterfront blamed for cancellation or rewriting of boaties’ policies.
New Zealand's largest marine insurer has judged it no longer worth the risk covering multimillion-dollar boats in Auckland's Viaduct Marina, as the hazardous construction site of the Park Hyatt hotel looms metres away.
NZI customers have been informed their hull insurance in Viaduct Marina is now in a "decline zone"with existing coverage being cancelled mid-term or renegotiated to be less comprehensive.
It has left boaties scrambling to secure the $10 million public liability insurance they require to berth in the prime downtown Auckland location by another provider.
This includes construction of: the $300 million Park Hyatt on the doorstep of Viaduct Marina, a seven storey office block on Madden St, as well as excavation of Daldy and Gaunt Streets for road upgrades.
Aucklander Donald Thomson was contacted by his PIC insurance broker in September to inform him NZI's coverage of his 18-metre motor-boat was being cancelled, and the remaining three months of his 2018 cover refunded.
"I just told them I'd moved from Picton [marina in Marlborough] and the boat was now in the Viaduct, not thinking, just to inform them, and they came back and said 'oh jeez, where are you?'" Thomson said.
Thomson's boat had been insured with NZI for four years, costing $5500 per year, and he still has his house, caravan and car covered with the company.
Despite his insurance broker informing him he was "hopeful" NZI would honour his boat cover as an existing client, Thomson was eventually told "ongoing work there" had left the Viaduct a "straight-out decline location".
"NZI have had around four to five very large claims from vessels within the Viaduct Marina due to the construction sites in Wynyard Quarter/Viaduct Harbour causing metal shavings and the like to be blown over on to vessels moored in the marina," Thomson's broker added via email.
When asked by the Herald on November 2 whether they were insuring boats in the Viaduct, a spokesperson for IAG insurance, the parent company for NZI, refused to clarify any new blanket policy.
But this week, IAG admitted a "decline zone" existed.
"The Viaduct Marina can be described as a decline zone; however IAG will still assess each policy application on a case-by-case basis," an IAG spokesperson said.
Thomson has since secured new boat insurance though Vero.
Another boat owner in Viaduct Marina, who wished not to be named, has been able to renegotiate his vessel's insurance with NZI, excluding coverage for his cheaper paint job.
The seven storey Park Hyatt hotel, on Halsey St in Auckland Viaduct, is due to open mid-2019.
PIC Insurance account manager Daniel Garner said he was aware of "half a dozen" claims in the Viaduct Marina that have got insurers cagey.
"Those steel filings, there have been significant number of claims. At one stage they were looking at running a class action," Garner said.
"In terms of a ballpark figure for rust filings, you're talking between $50-$60,000 for repair cost. That's if you can repair it, and it's very rare that you can get every single rust filing off the boat.
"You're looking at 24 months ago when you had the worst case of it. That's when Hawkins kicked off that big construction they're doing [Park Hyatt]. Of course insurance companies work off historical statistics.
"Now if you went through a broker and asked would you insure a boat excluding rust filings, they'd probably insure the boat. But the problem is you'd be selling your client a pretty massive disservice because that's probably the biggest risk they're facing."
However, despite NZI's recent decision there has been no mass exodus by insurance companies covering boats in the Viaduct.
Mariner Marine Insurance's Aaron Mortimer says they still have boats insured in Viaduct Marina.
"Certainly we're aware of claims there through particles coming off building sites landing on decks and crews having to jump up and furiously clean the deck before the damage is permanent," Mortimer said.
"We have been approached by boat owners there saying I'm struggling to get cover or I'm not having my policy renewed.
"Some insurers, and I'm not saying NZI specifically, they may jump up and down if they have a bad experience, and decide the best course of action is not to insure any more boats. That's a valid underwriting outcome, but it really just depends on your risk appetite."
The Insurance Council of New Zealand, who represent and advise best practice for insurers, refused to comment on the issue of Viaduct coverage.
