Insurance premiums should remain stable

Dunedin insurance premiums are unlikely to be affected by last week's flooding, insurers say.

Millions of dollars worth of claims had been lodged since the flooding, but insurance companies said they did not believe a spike in premiums would follow.

An insurance insider who spoke to the ODT anonymously said the Dunedin floods were ''quite small in terms of losses''.

''The reality is South Dunedin is tiny, in the big scheme of things. The insurers can accommodate this event.''

With the DCC having firm costed commitments to upgrade and replace the city's worst performing parts of its sewerage network, insurers would see the future risk of flooding in the city as relatively minor.

That was in contrast to earthquakes, which were generally not considered preventable in terms of losses, he said.

He said comparing the Dunedin flooding event with the Christchurch earthquakes was pointless.

Much of the insurance issues Christchurch had struggled with were linked to the Earthquake Commission.

Insurance claims from flooding were not an EQC issue.

IAG's customer claims general manager, Brendan McGillicuddy, said weather events tended to affect all areas across New Zealand and premiums already had weather events factored in for their likelihood and severity.

''A single extraordinary weather event, such as Dunedin experienced, is not likely to substantially affect Dunedin's future premiums, if at all,'' Mr McGillicuddy said.

He said IAG, which owned brands including AMI and State, had received more than 700 flood-related claims by 1am yesterday, and most assessments were already complete.

The rest were expected to be completed over the next week.

The expected repair and replacement work needed would likely be finished within four months, he said.

A spokeswoman for AA Insurance said their premiums were based on claims data collected over extended periods.

''With this in mind, customers who live in Dunedin will not see a rise in their premiums as a direct result of the flood.''

The spokeswoman said AA had already actioned the majority of flood-related claims, though a few claims for significant damage, including damage to homes and driveways, might take longer.

''But we don't anticipate any long delays.''

Add a Comment



Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter