Should taxpayers subsidise people who choose not to insure their homes?
This was the burning question that arose at last week's Insurance Council conference at SkyCity in Auckland where insurers were briefed on industry trends in relation to climate change.
The answer, one insurance company executive jokingly said, depended on which hat you wanted him to wear: one as a good human being, or one as an insurer.
Of course, from a commercial insurance company point of view, any path to compulsion should be actively pursued.
But from a moral standpoint it's not so easy, even when putting the issue of affordability to one side.
Earlier in the conference, participants heard from Marty Grenfell, chief executive of Tauranga City Council.
He gave a first-hand account of the devastation caused by ex-Cyclone Debbie when it struck the small Bay of Plenty town of Edgecumbe in April last year.
About 1600 people were evacuated when the Rangitaiki River burst a stop bank, destroying 14 homes and causing extensive flood damage to 305 more.
It didn't take long for reports to emerge that 30 per cent of the affected community were uninsured and decisions had to be made about what approach the local politicians should take.
What the council did was set up a Liveable Homes Project to help the uninsured make their home habitable again.
By most accounts this was seen as the right thing to do, certainly from a community point of view. But while funds were raised from various charities, the initiative still came with a cost to the local council and ratepayers, not to mention the potential moral hazard considering those neighbours looking on who suddenly thought their endless years of paying insurance premiums was completely unnecessary.
There's always a fine line to consider. But there are increasing cases here and in Australia when disaster strikes where people who are not insured have done as well, if not better than people who have taken an informed decision to insure.
And the issue is likely to get bigger.
As Minter Ellison special counsel Sarah Barker told the conference, in some Australian coastal hazard zones and bushfire prone areas, people simply can't get insurance any more because the risk is too high to underwriters.
What's happening, she said, is there are properties being rebuilt four, five or six times with no improvement to their capacity to be resilient or less vulnerable.
So risk insurers are now looking at the health insurance sector in Australia where a Medicare levy surcharge means those who don't have private hospital cover could be taxed an extra 1.5 per cent if they earn more than $90,000 per annum.
It's a way of ensuring that people with the ability to do so actually do pay their way or move to a less risky environment.
New Zealand is the ideal country to confront the issue head-on because while we have been focused on earthquake insurance claims, flood risk in particular is seen as increasing.
Whatever your views on the central topic of climate change, some of the figures presented were startling.
Niwa sea level expert Rob Bell spoke of $38 billion of New Zealand residential and commercial buildings potentially in the flood zone if sea levels rose from today's levels to up to 1m higher.
Around the world more than $2 trillion worth of assets were situated within 1m of sea level, said Robert Muir-Wood, the chief research officer of science and technology at catastrophe-risk-modelling company RMS.
Those assets ranged from key infrastructure and utility businesses like airports, power plants and refineries, to residential apartments and marinas.
Already there is a great retreat from the coast, he said, while predicting it to become more of an agenda here in the future.
Getting back to the question of taxpayer support for the uninsured, affordability needs to be taken into account. But it's time to open up a broader debate on the topic.
It is unreasonable for those who do pay annual premiums for years to look on as those who don't are assisted by disaster relief be it government or charity.
It also creates a moral hazard.
On the other hand it's hard when you are looking at a town whose residence has been decimated and there is an obligation to take a whole community approach to restoration.