2016 in review:
With 2016 gone and everyone returning from the beach, it is a good opportunity to reflect on the events of the past 12 months and provide an update on changes to the insurance market for 2017.
2016 saw a large rise in the prevalence of meth contamination claims and costs. This has had impacts across the entire market, and seen a lot of media attention.
The Kaikoura earthquake of 14 November also had an impact on the insurance market. Repairs are expected to cost hundreds of millions in repairs, says the Insurance Council’s Tim Grafton (read more here).
This means that insurance premiums across the board are likely to increase further as more costs to the Kaikoura earthquake are realised. Areas affected by the quake are also seeing stricter rules for cover, especially properties in the Wellington/Nelson area.
While there have been some challenges, there are some positive results as well.
An agreement was reached between EQC and many private insurers (including Initio) that claims for damage caused by the Kaikoura earthquake can now be handled directly. This means that claims no longer need to go through EQC, and makes the process quicker and easier.
Further good news is that the old guidelines for meth contamination and remediation have been reviewed. The government has indicated that they will be adopting the new guidelines which have higher limits in place (MoH Summary). Ultimately, this should reduce the cost and exposure to property owners.
The government is also considering ways to deal with the Holler v Osaki issue, which saw tenants exonerated from accidental damage caused to properties. Housing Minister Nick Smith announced plans to change the law so that tenants would be liable to some extent, which should provide some relief to property owners.
With continuing changes in the property market, 2017 promises to be an interesting year.