State and NZI yesterday both confirmed that new warningson city council-issued land information memorandums (LIMs) would not affect how they insured much of South Dunedin and the city centre.
In a joint statement prompted by inquiries from the Otago Daily Times, IAG New Zealand's insurance brands said they continued to treat requests for insurance in Dunedin as they always had.
"It's not considered to be any higher risk than previously and there are no plans to make changes to the way requests for insurance in Dunedin are considered at this stage," they said.
The warnings came to light when property hunter Leanne Clark requested a LIM for a Forbury Rd property.
The LIM said the land might be subject to increased seismic movement - which had been on LIMs for some time - plus a new warning that the land "may be at risk of liquefaction in a severe earthquake".
It also said a site-specific foundation design may be required.
Two companies subsequently said they would not insure the property, she said.
Dunedin solicitor and member of the New Zealand Law Society's property law section's executive, Todd Whitcombe, said a client in the affected area was also struggling to get insurance.
Yesterday, he said two insurance companies had since said they could do something for his client.
Regardless, he urged property purchasers to talk to their insurers and lawyers before signing their contracts.
Insurance Council of New Zealand chief executive Chris Ryan said State and NZI had responded as he had expected: the LIM warnings simply drew attention to an already known and understood risk.
"And it's an accepted risk and most of the time it is benign," Mr Ryan said.
"It's probably a positive and quite a good move by the DCC to let people know where there is a risk to properties, no matter how rare that risk may be.
"It will help home buyers and home owners understand that risk but hopefully, it should not affect their insurance."
The Otago Daily Times sought comment from AMP, whose spokeswoman referred the newspaper to Vero - which underwrites AMP's general insurance policies.
Vero spokeswoman Vasantha Naidoo could not comment without first discussing the LIM entry changes with staff who dealtwith earthquake issues.
They were yesterday busy working on Canterbury earthquake-related issues.
AMI Insurance referred the newspaper's emailed questions to chief executive John Balmforth, of Christchurch, who had not responded by late yesterday.
Council city environment general manager Tony Avery, who last week said the warnings' wording might be reviewed, could not be contacted late yesterday, but late last week said the warning, based on a 1993 map of soil types potentially susceptible to liquefaction, had been on LIMs for some time.
Council hazards adviser MWH included the other warnings in September, when the Christchurch earthquake made liquefaction common knowledge, he said.
