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An insurance collective of South Island councils is being formalised in preparation for future disasters and subsequent claims.
Environment Southland is a member of the South Island Council Collective for Insurance.
On Thursday, organisational development and transformation general manager Amy Kubrycht explained at a committee meeting the collective was made up of mostly smaller councils.
"We collectively insure so we can get a better rate and better consideration from our insurers from London."
Discussions were under way
to formalise the agreement, which at present worked on a trust model.
This was driven by Queenstown Lakes District Council, which suggested a memorandum of understanding, she said.
Councillor Allan Baird asked whether there was concern not all collective members were "bringing out all their cards".
In response, Ms Kubrycht said should there be a significant disaster after which all councils were looking to claim, there was a question of what would happen if some needed to claim more than others.
"That’s not been mapped out.
"We should be doing that in peace time, as it were."
The council owned infrastructure assets to the value of $67 million, largely comprising 458km of flood banks.
Ms Kubrycht also noted, following the Covid-19 pandemic, the insurance market was hardening.
Beyond this, particular events that would previously be considered unforeseen could change given the impacts of climate change.
She said they might therefore find themselves in a position where self-insuring was necessary.
Advice was being sought on behalf of the collective as to what the formalisation would look like.
Ms Kubrycht said the council would be notified of any legal agreement for consideration.