A climate expert has issued a startling warning that around 40,000 flood-prone homes could lose insurance in the next 20 to 30 years.
A recent Government report revealed $100 billion worth of homes are at risk of flooding, which could affect 675,000 people – that’s 1 in 7 Kiwis.
And managed retreat could cost $3.75 billion a year.
Insurance Council chief executive Tim Grafton told AM if the risk isn’t reduced and vulnerable communities aren’t relcoated then “inevitably, insurance does its job”.
“[It] signals through price then increasingly it becomes less affordable to insure your property,” Grafton said.
“This is why something needs to be done about it. Really pleased to see things brought forward with the Roche task force with the mandate to look at how and where the potential relocation may occur.”
Grafton told AM’s Ryan Bridge even before the Auckland Anniversary floods and Cyclone Gabrielle, Kiwis were seeing a “steep rise in premiums”.
“That was on the back of high inflation, high building costs and the insurance that the insurers buy offshore to diversify their risk. We’ve got the hardest market in a decade.”
So how many homes are at risk of flooding? H2
Senior civil and environmental engineer Aidan Cooper says while there’s a “large number” of homes at risk, “we don’t know” the exact amount.
“So I think this a great opportunity to start identifying that and start adapting.”
Belinda Storey, managing director of Climate Sigma, which does climate scenario analysis and asset valuation, says around 40,000 homes are going to lose insurance in the next 20 to 30 years.
Though Storey says she can’t be confident in the estimate because “adequate mapping of that risk” isn’t available.
Auckland has accurate flood models, but Storey says many other regions across the motu don’t.
Storey is caling for investment in flood risk assessment on a national scale “so you don’t have a situation where Auckland has got excellent information and other regions don’t.”
Storey says Lidar, a technology that’s been around for decades, is needed because flood mapping can’t be done without it.
“We have a better understanding in the topography of the moon than we do of Hawke’s Bay, so we need to be making major investments in our risk on a national scale.”
Following the Auckland floods and Cyclone Gabrielle, Cooper says now is the opportunity to change that.
Watch the full discussion above.