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Wellington apartment owners abandoning insurance as premiums spike

Newshub logoNewshub 4/05/2019 Sam Farrell
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Some Wellington apartment owners are ditching their natural disaster insurance, saying they can no longer afford it due to skyrocketing premiums.

Some premiums have tripled in cost since 2016 and some owners are now opting to take the risk - despite it putting them in breach of their mortgage conditions.

"They feel as though they have no choice but to take the risk," says Geraldine Murphy, the spokeswoman on seismic strengthening issues for Inner-city Wellington.

They feel they have no choice, she says, because insurance companies are hiking prices because of Wellington's earthquake risk.

Murphy says it's disproportionate, especially for those who live in older apartment blocks.

Newshub spoke to a woman who didn't want to be identified, but says she and her seven other neighbours are thinking about getting rid of their earthquake insurance.

In the last two to three years, they've gone from paying just over $20,000 a year between them to around $57,000.

Mayor Justin Lester wants an industry discussion around pricing, admitting he had to make sacrifices after the 2016 Kaikoura quake.

a train on a steel track: Insurance companies are hiking prices due to the earthquake risk. © Newshub. Insurance companies are hiking prices due to the earthquake risk.

"I had my own business and it meant it became too expensive, so we didn't insure for earthquake for a period of time and when the prices came down we then insured again," he says.

Lester says risk-pricing by insurance companies can't always be avoided and high seismic areas fall into that.

But he'd like to see more consistency.

"Let's make sure we've got good coverage around the country at affordable levels and make sure that businesses can operate and people can keep their houses insured," he says.

In a statement, Consumer Affairs Minister, Kris Faafoi, says the Government is closely watching the issue and is working to make sure consumers are treated fairly.

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