“The impact of repair costs continues to run ahead of general inflation and taxes and levies, which are out of the control of insurers and account for around 40% of a premium,” a spokesperson said.
“Insurers are also moving toward greater risk-based pricing as more is known about natural hazards such as earthquake and flooding risks, which is also affecting premium levels.”
While Wellington has had stark rises in insurance premiums in recent years, Canterbury is now also experiencing steeper hikes.
Quashed’s data shows average house insurance quotes rising 18% in Canterbury, 13% in Wellington and 7% in Auckland.
“We’ve seen increases in Canterbury which outpace Auckland and even Wellington,” chief executive Justin Lim said.
Consumer NZ is calling for the Financial Markets Authority to investigate whether risk-based pricing is being applied fairly to all households.
It’s also calling for the Commerce Commission to carry out a market study into competition in the sector similar to previous studies into personal banking, residential building supplies, supermarkets and fuel.
“Our research shows people are dropping cover or being priced out entirely, and this will only get worse without serious intervention,” Consumer NZ investigative team leader Rebecca Styles said.
Tower Insurance is the latest provider to make an announcement about risk-based pricing, confirming changes that mean most customers will pay less for insurance each year.
The Insurance Council said some properties will cost more to protect than others, with premiums being based on a range of risk factors.
“Properties on flood plains or near major rivers are more prone to flooding during heavy rainfalls, while those in regions with higher seismic activity are more susceptible to earthquake damage,” it said.
Michael Sergel is a senior reporter and radio news director for Newstalk ZB, usually based in Auckland. Michael has been covering business, politics, local government and consumer affairs for more than a decade. He joined NZME in 2013.
