Coastal Wellington homes could face soaring insurance premiums due to sea level rise. Photo / Mark Mitchell
Coastal Wellington homes could face soaring insurance premiums due to sea level rise. Photo / Mark Mitchell
A Wellington city councillor says new developments must take into consideration climate-change risk and sea-level rise.
A major report published this week showed the flood risk to seaside homes would increase significantly as sea levels rise, to the extent that insurance companies may pull out of insuring seaside homes altogether.
Wellington city councillor Iona Pannett, who holds the climate change portfolio and has voted against seaside developments, said the findings were not unexpected.
"The insurance industry has long known about climate change and has taken that into account in terms of their forecast.
"I would expect that the insurance industry would pull out completely around climate ... it's of great concern because people will not be able to fix their properties if they're not insured."
A report published through the government-funded Deep South Challenge examined the risk for 10,000 homes in New Zealand's major cities that were located in one-in-100-year flood zones, and showed the risk would rapidly increase as the planet warmed.
Ten centimetres of sea-level rise is forecast in Wellington by 2040, which could push the probability of floods up to a one-in-20-year event.
With the insurance industry typically starting to pull out of properties when disasters became one-in-50-year events, Wellington homes near the coastline could face soaring insurance premiums within 15 years. That is, if they could be renewed at all.
The report drops in a week where houses in the Wellington region have been evacuated due to flash flooding, and Prime Minister Jacinda Ardern plans to declare a climate emergency.
As a coastal nation, New Zealand is vulnerable to sea-level rise, but Pannett said the added earthquake risk in the capital would also impact insurance.
Her biggest concern was that seaside homeowners could be unable to sell if companies were no longer willing to insure their properties.
Wellington City councillor Iona Pannett says the report was not surprising. Photo / Mark Mitchell
"So then the issue is how do we as a country support owners, because no one wants to see anyone bankrupt," she said.
Homeowners would either have to self-insure, or the government would need to step in to provide an insurance scheme.
Pannett was concerned about developments along the coast and encouraged Wellingtonians to think about the future when deciding where to build.
"We would like to encourage people to make good decisions about where they build, [and] that they build to a high standard," she said.
Wellington could expect 10cm sea level rise by 2040. Photo / Mark Mitchell
She said developers were compliant with the current district plan, but the council was in the process of adapting their plan to account for sea-level rise.
"We know that developers are thinking about that and putting in litigation, [but] whether those litigations are adequate is the question we need to look at."
Last month the council voted to sell and lease land on Shelly Bay needed for the development of 350 homes. Pannett voted against it due to her concerns about the impacts of climate change.
She said at the time she would have liked further analysis on the risks of sea-level rise and was "extremely concerned about insurance" for the Shelly Bay development.
