Cyclone Gabrielle: Half a billion dollars in insurance claims in Hawke’s Bay

Hawke's Bay is facing the highest insurance cost of any one region in the aftermath of Cyclone Gabrielle. Photo / NZME

Nearly half a billion dollars of insurance claims have been made in Hawke’s Bay after Cyclone Gabrielle.

Provisional data from the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) reveals there have been 13,221 claims in the region related to damage from the cyclone, which total $481,227,673.

It’s more than half of the total value of claims to date across the entire country related to the cyclone, which caused widespread chaos across the North Island in mid-February.

In Hawke’s Bay, there have been 3780 claims for home insurance, 3939 for contents insurance, 2426 for commercial insurance, 2893 for motor vehicle insurance, 52 for marine insurance and 131 claims of other varieties.

There have been 40,275 claims made across the country with a value of $889,845,149, of which about $70 million has been paid so far.

The cost of claims met by Toka Tū Ake EQC (EQCover) is not included in the ICNZ data.

ICNZ chief executive Tim Grafton said insurers had paid out over $180m in claims across the Auckland Anniversary weekend and Cyclone Gabrielle climate events so far.

“Once again, the community response to this second climate-related disaster to hit Aotearoa this year has been incredible.

“Insurers are doing all that they can to get assessments completed and to agree on the next steps with customers. In the meantime, insurers have been working hard to activate temporary accommodation benefits for homeowners and renters alike.”

Insurance Council of NZ chief executive Tim Grafton. Photo / Supplied

Minister for Cyclone Recovery Grant Robertson said in a statement that the Government’s Cyclone Taskforce, led by Sir Brian Roche, was working with local government and insurance companies to assess the impact on high-risk areas and what that means for rebuilding.

“We are making good progress, with the insurance sector agreeing to provide the taskforce with a consolidated view of the areas they have identified as high-risk within the next week. This will then be overlaid with the risk assessments that local councils are carrying out.”

He said ministers expected to come together around the beginning of April when they can agree on the next steps.

“It’s worth noting that after the Canterbury earthquakes, it was four months before decisions were taken on the future of affected areas. We want to move quicker than that, but it gives an indication of some of the challenges to making decisions.”

Robertson said it was important to highlight that having a red or yellow sticker on your property does not necessarily mean that a location will be deemed high-risk or that the land can’t be rebuilt upon.

He said it was also important to note that there was a range of potential responses to the assessments.

“Managed retreat [ie not rebuilding in the area] is one possibility, but so are other resilience measures, including building or enhancing stopbanks, changing the structure or location of buildings or building in a different way.”

EQCover, the Government’s natural disaster insurance for residential buildings and residential land, is automatically in place if the property is privately insured.

EQCover applies to landslip damage to the home and residential land, debris and silt inundation from floodwater on insured residential land only, and land scour where the soil is carried away by overland water flow for insured residential land only.

Private insurers generally provide cover for flood damage to homes, contents and vehicles, so EQCover does not apply to damage within homes caused by debris or silt inundation from flooding or high winds.

Tina Mitchell, chief executive at Toka Tū Ake EQC, said a customer’s private insurer manages their entire natural disaster claim, including the damage that falls under EQCover, no matter the cause of the damage.

“The EQC Act defines earthquake, natural landslip, volcanic eruption, hydrothermal activity, or tsunami as a natural disaster,” Mitchell said.

“A storm or flood is considered to be a natural disaster only in relation to residential land [not a residential building].”

She said they were currently receiving advice from geotechnical and landslip experts on how the statutory cover relates specifically to Cyclone Gabrielle.

“We are committed to meeting our statutory obligations for our customers, and want some further clarity to ensure we do so.

“Every insured property will receive an assessment to understand the amount of damage and the cause of damage for that specific property, as every situation is unique for each property.”