Updated projections have just changed what we know about New Zealand's risk from rising seas – and for most parts of the country, the news isn't good. Science reporter Jamie Morton looks at three big take-aways for coastal homeowners.
If you own a home within a seaside area that's at risk of a one-in-100-year flood event, you're likely to lose insurance within your lifetime.
Perhaps within the next 10 years.
"And if you're in a place already exposed to one-in-50-year event," Belinda Storey says,"then you could lose insurance in a year ... you could lose it tomorrow".
The climate risk analyst says that's the grim reality coastal homeowners need to be preparing themselves for now.
According to New Zealand's most recent risk assessment, 72,065 people live in areas exposed to that once-a-century risk. About 675,500 people live in areas prone to flooding.
But those figures are almost certainly under-estimates, given what scientists have just told us about the true risk New Zealand faces.
Because we haven't factored in the crucial element of sinking and climbing land alongside sea level rise, we haven't had the full picture.
We now do, and it shows that many places can expect double the amount of sea level rise previously projected.
Main centres like Auckland, Wellington, Napier, Marlborough and Nelson might be facing more than half a metre of rise by mid-century.
With just 30cm of rise enough to make 100-year coastal storm surge and flooding an annual occurrence, fast-sinking parts of our coastal cities could cross that threshold by 2040.
Global sea-level rise of 25-30 cm by 2060 is unavoidable regardless of our future emissions pathway. But in many of NZ’s most populated regions vertical land movements mean these changes may happen 20 to 30 years sooner than previously expected https://t.co/AC9EsguIJ3 pic.twitter.com/IX2ovlb7lc
— NZSeaRise (@NZSeaRise) May 2, 2022
In a recent paper, Storey explored the risk for about 10,000 homes – a figure now likely closer to 40,000 - in Auckland, Wellington, Christchurch and Dunedin that lie in one-in-100-year coastal flood zones.
International experience and indications from New Zealand's insurance industry suggest companies start pulling out of insuring properties when disasters like floods become one-in-50-year events.
By the time homeowners' exposure had risen to one-in-20-year occurrences, the cost of insurance premiums and excesses will have climbed sharply - if insurance could be renewed at all.
Hundreds of homeowners in Auckland with current median coastal flood premiums for once-in-a-century events of $2000 could reach that one-in-20-year threshold with just 15cm of sea level rise.
If insurance was still available at that point, premiums would have soared to $10,000.
For the 1740 Wellington homes modelled, median premiums could jump from $1800 to $8700 for seas 12cm higher.
The research also suggested just small increases in sea level would likely cause at least partial retreat by insurers for most of those 10,000 homes, within 15 years.
"People assume that if they pay their premiums on time and don't engage in insurance fraud, then insurance will always be there for them," said Storey, managing director of Climate Sigma.
"But if the risk becomes too great for the insurer, then they have no obligation to continue your insurance."
Even a small amount of sea level rise could shift the probability of flood to 5 per cent each year; in the UK, private insurers signalled they would pull cover if that risk reached only 1.3 per cent.
Last year, in what was the industry's costliest for extreme weather claims, Tower took the symbolic step of becoming New Zealand's first insurer to begin making modelling flood risk, and making ratings public.
It meant its customers would receive either a low, medium or high rating for their home, reflecting the potential risk of a flood and the estimated cost of replacing or repairing damage caused by flooding.
For nearly 90 per cent of customers, the change meant they would receive a reduction in the flood risk portion of their premium, at an average of about $25 each.
While that was just a small amount, the signal sent was significant.
Insurance Council chief executive Tim Grafton said while underwriters already had some of the best data available, the new sea level rise data was welcome.
Because risk assessments were typically carried out on a regional rather than local basis, it allowed better definition.
"Taking a localised approach to risk assessment and underwriting also allows many other factors to be considered such as the disposition of other hazards, including other types of flood risk, not just the risk of a property being inundated by storm surge or gradually being eroded and overtaken by the sea," he said.
"As such, sea level rise is just one factor in the equation when assessing insurance on an all-perils basis."
Considering one estimate of the current rateable value of exposed residential property, $17 billion worth of homes could be at risk.
Add together all private and public properties and assets lying in coastal floodplain areas, and that sum climbs to nearly $150b.
In spite of scientists' warnings, Storey said the property market had barely recognised the risk.
"Because of other economic pressures, the housing market at the coast is going in the exact opposite direction that I would expect it to," she said.
"In saying that, most locations that are low-lying should start experiencing a discount soon.
"But at the moment, places that have got a very clear time limit on them are experiencing just a small discount, or only about 4 per cent, when it should be closer to 30 or 40 per cent."
Insurance remains a requirement for residential mortgages, and failing to maintain them can trigger defaults.
While mortgages are often granted with repayment periods of up to 30 years in New Zealand, insurance contracts are renewed annually. An insurer could exit a market within 12 months, while a lender could still have decades before their loans matured.
Despite rules requiring mortgagors to insure, a general absence of compliance checks meant banks currently didn't know whether some properties they mortgaged remain insured beyond the first year of ownership.
But Storey expected that new climate-risk reporting requirements for banks and other institutions should have a positive effect.
"If you're a bank with 500,000 houses in your portfolio and only about 10,000 of them are at risk on the coast, you're probably not going to be too worried about that," she said.
"But if you suddenly find 100,000 homes in your portfolio could face insurance retreat because they're on an inland floodplain, you're going to be more worried."
Otago University researcher Associate Professor Ivan Diaz-Rainey, who is leading a major study investigating this issue, points out that more than 60 per cent of the four largest banks' loan portfolios are made up of housing loans.
That meant just a relatively small proportion of stranded assets – which houses could become if the once-a-century risk turned annual – posed a threat to financial stability.
Even if exposed homeowners might have some insurance in place, Diaz-Rainey said banks might begin thinking twice about lending.
Storey felt that, while we couldn't completely rely on market forces to address the problem, she worried that backing property owners with public insurance could prove its own disaster.
"If there's any hint to the market of the Government providing insurance, we'll just keeping building more houses in these places, putting more people in harm's way and making the problem worse."
Given thorny issues around legal powers, resourcing, funding and risk of litigation that come with it, councils have been increasingly calling on Wellington for support and guidance.
At the centre of the Government's response is an ongoing legislative reform to replace the Resource Management Act, and a draft national adaptation plan it's just asked for public feedback on.
While councils say they can't afford to bear all of the costs, Climate Change Minister James Shaw has made it clear the Government won't be footing the entire bill either.
"The key thing about New Zealand is that, because we've a relatively short period of European settlement, and we've ignored indigenous knowledge, we lack local history that could have taught us about the risk of very big storms," Storey said.
"That means we've tended to hug our coasts very tightly."
Over our recent past, however, we've had more than enough time to act.
Former Niwa scientist Dr Rob Bell, now running the consultancy Bell Adapt, said the risk was flagged nearly four decades ago, when he was involved in developing a coastal hazard zone in the Coromandel town of Pauanui.
The science has evolved over time with various assessments and reports that he's been involved with – but he said the biggest step-change in awareness was 2010's updated NZ Coastal Policy Statement.
Then came what he called "the summer of coastal storms" over 2017 and 2018, which affected hundreds of homes across the country.
"We all realised, we've got a problem," Bell said, "so what can we do about it?"
Even so, more than $2b of now-vulnerable homes have been built within roughly the past decade, and development in at-risk spots is still being consented today.
In the absence of tougher laws and regulations, planning and development practices continue to focus on trying to instead manage the risk, through measures like raising houses or building hard barriers.
Such steps are all but certain to have only a temporary effect, commentators say, and will simply transfer costs to future generations as the problem worsens.
At the extreme other end of the scale is managed retreat, which sometimes involves shifting entire communities out of the firing line.
Unlike other countries, New Zealand has little experience with this measure – and the near two decades and $17m it took for a council to buy and relocate 16 exposed homes in the Bay of Plenty town of Matatā offered a taste of the enormous cost and effort that would be involved in repeating that at scale.
Shaw said one suggestion within the draft adaptation plan was to make government coastal hazard guidance for councils "more directive".
"While that places requirements on councils, in many ways, it also makes it easier, because there is a very clear set of rules you need to follow, and it takes some of the interpretation or choice away," he said.
"It also provides a kind of legal back-stop for councils who are under pressure from developers to open up areas that might be inappropriate to build on."
At the same time, commentators say councils shouldn't be waiting on the Government to do more now.
Last year, for instance, experts said that by collaborating and making better use of existing rules, laws and plans, councils could shift away from building sea walls and avoid signing off on risky consent applications.
Along with that obvious step, Grafton said he wanted to see local councils, property owners and communities building the latest sea level rise data into their own decision-making.
"Another part is using this data to model the effectiveness of any proposed adaptation investment designed to protect against natural hazards," he said.
"Insurers do like to see firm evidence that any flood defences, for instance, have been designed, built, and are being maintained, against good data."
Elisabeth Nicholls was reported missing from Riccarton on June 4.