Christchurch Homeowner Ditches Insurance Over Soaring Premiums Driven by Sea Surge Risk
A Christchurch man has abandoned his home insurance policy after premiums increased by over 30% annually – a $1,000 jump – due to updated risk assessments. the case highlights a growing tension between insurance companies’ data-driven pricing models and homeowners’ perceptions of actual risk, notably concerning natural hazards.
A resident of the Burwood suburb discovered his insurance costs had skyrocketed after Tower Insurance factored in potential risks from sea surge, landslips, earthquakes, and flooding.the homeowner, identified as Trevor Taylor, vehemently disputes the sea surge assessment, arguing his property is several kilometers inland.
“They are doubling down and saying ‘no, I am at risk here’ and I just think it’s a load of rubbish,” Taylor stated, expressing frustration with the insurer’s unwillingness to reconsider the assessment.He requested the specific data used to evaluate his property,but Tower refused to disclose the details,citing commercial sensitivity.
Taylor’s concerns center on the improbable path a sea surge would need to take to reach his home. He detailed a scenario involving water traveling up an estuary, through a river, breaching stopbanks, and ascending uphill before impacting his property. He believes this journey is “quite ridiculous.”
Despite Tower’s claim that its risk assessment is based on approximately 200 million data points, Taylor remains unconvinced. He pointed to data from the Ministry of Environment, which indicates that storm surges rarely exceed 0.6 meters on New Zealand’s open coasts. While acknowledging that surges can be higher in estuaries and harbors – with a recorded peak of 0.9 meters in Kawhia Harbour in May 2013 – he maintains that Tower is significantly overestimating the risk to his property.
Taylor filed a request under the Privacy Act for all information Tower held on his property, but this was also denied, again on the grounds of commercial sensitivity. He expressed a desire for a representative from Tower to visit the area and assess the situation firsthand. “I’d actually like someone from Tower to get out of their ivory tower in Auckland and come down and we’ll drive around and have a look and I can just show them how ridiculous it is.”
He also noted a perceived lack of consistency in risk data between environment Canterbury, local councils, and government agencies. “I think risk pricing is fair, the thing is, I think they’re actually making up the risk,” he asserted, suggesting a need for independent oversight of insurance risk assessments.He proposed that government bodies or local councils collaborate to develop methods for mitigating these hazards.
In a statement, Tower Insurance explained that the high sea surge risk rating for Taylor’s property reflects the potential for flooding from nearby water systems, including the Avon River, Travis Wetland Nature heritage Park, and horseshoe Lake. The company emphasized that coinciding high tides and storm events can cause water to travel significant distances inland. Tower also noted its assessment aligns with the christchurch City Council’s flood map, which designates the property as being within a one-in-200-year flood risk zone.
Tower clarified that fewer than 10% of properties facing higher sea surge or landslide risks will experience an increase in their natural hazard premiums. Approximately one-third of those will see an increase of less than $100 annually, with the majority under $300. However, the company acknowledged that some customers with significantly higher risks will face more substantial premium increases.
The insurer defended its decision not to release detailed data, stating it would not aid customer understanding and is considered commercially sensitive. “For example our sea surge model considers a range of different past and possible tidal heights within storm scenarios – sharing this detailed data would not help customers understand their risks. It is also commercially sensitive. Instead, we simplify this information into a risk rating, which represents our evaluation of the insurance risk for a property based on this data.”
This case raises broader questions about the transparency and accuracy of insurance risk assessments in an era of increasing climate-related hazards and the potential for a growing number of homeowners to find insurance unaffordable.
