People who own properties prone to earthquakes or natural disasters may find their insurance becomes more expensive reducing the value of their home in the future, the Reserve Bank is warning.

And the central bank says that may only get worse as climate change risks become more acute, making insurance expensive and more difficult to obtain for those with properties at risk of rising sea levels and coastal inundation.

Insurer Tower moved to risk-based pricing in April last year, switching from spreading the costs across its customers to charging more for those insuring property in high earthquake and natural disaster

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Falling solvency ratios