Christchurch residents stunned by soaring Insurance premiums up to 36%

Christchurch residents have been hit with exorbitant insurance premium hikes, some reaching an astonishing 36 percent.

The impact of these increases has left homeowners, already burdened with escalating mortgage rates and the relentless rise in living expenses, struggling to make ends meet.

One resident told Chris Lynch Media he secured a "total package" insurance plan with AMI Insurance, and was taken aback when he received notice of a jaw-dropping 36 percent premium increase.

He phoned AMI for clarification, only to be informed that the surge was attributed to EQC's upward revision of rates. He described the situation as "absolutely obscene."

Another resident she said faced a significant 20.1 percent surge in her house insurance premiums, which catapulted from $1959.71 to $2353.19.

Her car insurance also bore the brunt of this surge, marking a 9.3 percent spike from $630.37 to $689.09.

"The insurance increases, coupled with the escalating mortgage rates, have created an uphill battle when it comes to paying bills, let alone affording groceries."

Yet another resident, who owned a holiday home in Hanmer Springs, was not exempt from the escalations.

Her payments with State Insurance ballooned by nearly $100 per month, despite a seven-year record of never making a single claim.

Another homeowner said in 2022, her coverage cost $3,018.97, and in 2023, with the same coverage and no claims filed throughout the year, her premiums skyrocketed to a staggering $4,195.97.

Bewildered by this astronomical hike, she sought clarification from a call centre overseas, only to be met with a vague explanation blaming "the weather."

Suncorp New Zealand, which owns brands including Vero Insurance New Zealand Ltd, Vero Liability Insurance Ltd, Asteron Life Ltd, AA Insurance Ltd, and AA Money wasn’t keen to comment.

When approached for comment, Molly Kirridge, Communications Advisor for Vero, replied "Vero is unable to provide a comment on your questions."

In August Suncorp New Zealand announced an after tax profit of $115 million for the year to June. A 30 percent reduction on the previous year.

IAG, New Zealand's largest general insurer, operating brands such as AMI, State, NZI, NAC, Lumley, and Lantern, did offer insight into their premium increases.

A spokesperson said there were a myriad of factors influencing premiums, including location, vehicle make and model, sum insured, and overall risk level.

“In addition to these variables, inflation and a changing insurance landscape, marked by significant reinsurance hikes over the years, have also played a role.”

The spokesperson said "pricing is also future-focused and adjusts in line with market fluctuations. It is crucial for policyholders to assess their vehicle's value annually and verify the sum insured in their policy."

The spokesperson also stressed the importance of anti-theft measures in light of a 43 percent surge in vehicle theft claims.

IAG New Zealand’s insurance profit was A$44 million in FY23, compared to A$220 million in FY22. 

John Lucas, Insurance Manager at the Insurance Council of New Zealand, shed light on the broader industry challenges.

He pointed out that rising claim costs, spurred by inflation and an influx of claims from recent disasters have affected all insurers.

Notably, over 100,000 claims valued at $3.18 to $4 billion resulted from these calamities, dwarfing previous years' claims, including those related to the 2016 Kaikoura earthquake.

Lucas cited an unprecedented number of total losses due to the twin climate disasters. (Weather related disasters in Auckland and the East Coast).

He also said increasing complexity and cost of repairing technically advanced vehicles was behind the increases.

He highlighted the global reinsurance market's heightened toughness, driven by years of record climate-related losses.

Lucas said “there’s no doubt these are tough times and people are facing cost pressures.

But, at the same time, the value of insurance has not diminished in its ability to put us back on our financial feet when the worst happens.

I know people in Christchurch understand this very well.”