An expert in climate change risk says those living in populated coastal areas like Wellington could lose their insurance cover in just a few years - far sooner than many owners realise.
It comes after new data shows the sea level is risingtwice as fast as previously thought in some parts of Aotearoa, once localised land subsidence is taken into account.
This has massively reduced the amount of time authorities have to respond in some areas - bringing forward damaging sea level rise expected in 2060 to just 2040 in places, halving the time to plan for mitigation or retreat.
Belinda Storey, an expert in climate risk relating to insurance and property at Victoria University and managing director of Climate Sigma, said until now insurance had been available for those living in one-in-100-year flood zones - that is, places that have a 1 per cent chance of damage from storms and inundation.
There have already been several once-in-a-century storms in just the past year or so.
The new sea-rise data released on Monday shows that in just 18 years parts of Wellington will have sea-level rise of up to 30cm - sufficient to cause damaging once-in-a-century storms to happen every year.
Storey said in 1 per cent zones, a small amount of sea-level rise can quickly lead to properties being uninsurable.
"If you [live somewhere with] a small tidal range, just a very small amount of sea-level rise, like 10cm, can be enough to shift you from a 1 per cent probability to a 5 per cent probability.
"Once you've got the 5 per cent probability, no insurer is going to insure you.
"So in Wellington with 10cm of sea-level rise, you've lost insurance, definitely lost insurance - you just won't keep it.
"[But] chances are you could have lost it before then. Ten centimetres gives you 5 per cent probability, but I'm saying that even at a 2 per cent probability, chances are insurers are going to start being very reluctant to continue to insure you."
Storey said insurers who did provide cover would be cross-subsidising it and it would not take much for them to withdraw it.
She said building in hazardous areas needed to stop immediately.
And she is not sympathetic to the idea that those who have bought waterfront property decades ago have less responsibility for bearing the cost of retreat, saying the certainty of sea-level rise has been known for a long time.
Tim Grafton, of the Insurance Council, said last week before the release of the new data that in places like Westport, which has had several severe floods in recent years, people could still get insurance, and that was not likely to change for a few years.
He said insurers did not have a defined trigger point for when cover would be withdrawn, and that each company makes its own call.
The Government, local councils and property owners are likely to have put some mitigation in place in the coming years to temper the effects of sea-level rise - which will also extend the life of insurance cover.
Grafton told Morning Report on Monday those in high-risk zones needed to be looking at their options including raising floor levels, increased protection infrastructure or retreating from those places where it was not sustainable to keep living.
He said if nothing was done, insurance will price the risk.
Sea-level rise itself is not covered by insurance, it is neither unforeseen nor sudden.
Claims for extreme weather events hit a record $321.6 million last year, breaking the record last set in 2020 at $274m.
Public flood insurance a bad idea - Storey
According to research by University of Canterbury civil systems engineering lecturer Dr Tom Logan, the total rateable value of exposed residential property (in the once-in-a-century zone) is about $17 billion.
Belinda Storey says in 1 per cent zones a small amount of sea-level rise can quickly lead to properties being uninsurable. Photo / Zahrina Robertson
About $2.6b of that was built after 2009 (which is the date threshold set by a UK public flood insurance scheme after homes are not covered).
EQC Minister David Clark is in charge of a work programme investigating flood risk and insurance, including whether the Government should support a national flood insurance scheme for residential buildings.
But Storey said the Government should definitely not go down this road because it will make things worse - incentivising continued construction in risky places.
"If you have a public scheme step in then you're transferring the risk from the private homeowner to the public - the risk doesn't disappear.
"In fact the risk goes up. Because if people are confident that there's going to be a significant public subsidy on that insurance, then people will build more things in harm's way. It's just the way it is."
The Government wants the public's input on its climate adaptation plans, and on so-called "'managed retreat" - abandoning areas where it is not possible or financially viable to live any longer.
