AA Insurance confirmed to the Otago Daily Times yesterday it would still be accepting new home insurance policies in Otago.
The company has been in the spotlight in recent days after it was revealed it was not offering new home insurance policies in Westport. That has since spread to areas on the outskirts of Christchurch.
It was then reported AA Insurance was not offering new policies in Blenheim and settlements just outside the town.
But an AA Insurance spokesman confirmed yesterday the policy of not offering cover for homes would not apply in Otago.
It was applying only to new policies and had caught out many residents in the areas affected so far.
Surrey St Flood Action Group convener Lynne Newell said when contacted yesterday she knew of no-one in the area who had been turned down for insurance cover.
"They can’t do it in South Dunedin. We don’t have any rivers, we don’t have any streams, we don’t have anywhere that can cause a flood," she said.
"We have pipes that don’t work and pumping stations that don’t work. That’s the story."
She said insurance companies could not deny people in the area policies as there were no natural hazards in the area.
"We have nothing in common with these areas in the North Island and places in the West Coast that are getting flooded. That’s not our situation at all."
She said the next time the area was flooded and damaged, people would not be claiming insurance as it was up to the Dunedin City Council to fund repairs as it was directly responsible for the harm.
AA Insurance declined to confirm yesterday it had stopped offering new home insurance policies in Blenheim and outlying areas of Renwick and Seddon. The wider Blenheim area flooded last winter after the wettest June on record since 1942, and some residents in Renwick were evacuated.
The company had halted new home, business and landlord insurance policies in Westport due to the high flood risk the town faces.
The insurer had also stopped offering new policies in the Canterbury townships of Woodend, Rolleston and Lincoln, saying it had reached its maximum exposure limit to seismic risk.
AA Insurance head of underwriting Dee Naidu said managing risk exposure was common practice in the insurance industry and the list of areas with temporary restrictions was not static.
"We are always monitoring where we are growing and the accumulation and exposure to risk from that growth. We have no plans to introduce any new temporary restrictions beyond those that have been previously reported on."
In a written statement, Finance Minister Nicola Willis said it was up to individual businesses to decide how they managed their exposure to risk.
Treasury’s annual insurance monitoring surveys "indicate that there is reasonable availability of online insurance quotes in areas of higher seismic risk", she said.
An Insurance Council spokesperson said insurance remained generally available across New Zealand.
"The insurance industry has consistently said it’s important New Zealand takes a long-term view on the risks from natural hazards as we face the prospect of more frequent and severe events due to climate-related events."
The council supported "a government-led approach to mitigate and adapt to changing climate and an agreed set of natural hazard and climate risk data so we are all on the same page".
— additional reporting RNZ
