'Enormous' Wellington inner-city insurance problem sparks survey

Wellington’s inner-city insurance woes are in the spotlight, as city council officials examine the fallout from the Canterbury earthquakes.

More than 7000 commercial building owners have been sent a survey by the council asking about issues they face when financing quake strengthening and insurance premiums.

The surveys are expected back around mid-November and the council’s number crunchers will then take time to collate the information.

Councillor and built environment portfolio leader Iona Pannett told NBR ONLINE she has received plenty of anecdotal evidence of people having enormous problems with their insurance.

“It is absolutely the top issue in the quake strengthening area because premiums have just gone through the roof. What we’re hearing is it’s not just for quake-prone buildings.”

She wants information on what people think about earthquake strengthening, what advice they have been given and information on how much people are paying in premiums.

“We are asking building owners to let us know what the problems and barriers are for them to be able to complete strengthening works and, if they are planning work, how quickly they plan to do it.”

Ms Pannett hopes to use the information in the council’s review of its earthquake-prone buildings policy and its advocacy to government when the royal commission into the Canterbury quakes reports back later this year.

The city council has identified 570 inner-city commercial buildings which need quake strengthening.

If you are a building owner with concerns, contact bcunningham@nbr.co.nz

This article is tagged with the following keywords. Find out more about My Tags

Post Comment

8 Comments & Questions

Commenter icon key: Subscriber Verified

I have customers who have plenty of horror stories to tell about insurance premiums in commercial buildings, but also residential apartment buildings. Worst I have heard so far are premiums for one building increasing from $17k per year pre-earthquake to $217K after 2 years. Spread over only 17 units, too.

Reply
Share

It does not make economic sense to invest in commerical buildings in Wellington if you have to pay high insurance premium. For the same money, it will make more sense to invest in Auckland or maybe Australia.

My gut feelings are
a. it will be a buyers market for commerical building in Wellington for the next 24 months.
b. the apartments will be next.

Reply
Share

CK apartments are all ready here...insurance premiums have gone up for older apartments in Wgtn 6 mths ago

Reply
Share

Nobody in NZ can control this including the local insurance companies. Rates are controlled by the international Re-insurace industry, so you better get used to it.

Reply
Share

This is an important conversation that needs to happen, and it will be interesting to see what is discussed at the Risk and Insurance for Commercial Property Managers forum in a couple of weeks.

Reply
Share

This is a business paper - surely readers should realise that the (insurance) market is sending owners of dangerous buildings a message? This is an international market where those taking the risks aren't interested in the machinations of vested interests seeking subsidies and advantages over the public. The insurance message is also coming over climatic events....

Reply
Share

get with it, it's all over for the "old" cities Wellington and the Provincals, every one has to live in Auckland, thats why house prices are being driven up there, its the "modern city" its building might leak a bit but getting wet is a lot better than being in a sardine sandwich.

Time for some common sense here, if there isnt all of the "mainstreet" buildings of provincial towns and cities will be rendered valueless, through irrational council regulations, in ability to insure at price that is commercial viable, such that mortgage funding is withdrawn

Where is Government - no where, Government doesnt interfere in the market - where is common sense - hard to find in Wellington!!

Reply
Share

Now that insurance companies are writing cheques for Christchurch it's rather timely that premiums in some cases triple in one year especially those on reclaimed land

Why do we bed full replacement insurance that in some cases is double the fair market value of the building

If the bank loan is covered and the owner shares the risk surely that is something we should be looking at to reduce our premiums

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7897 0.0038 0.48%
AUD 0.9124 0.0008 0.09%
EUR 0.6282 0.0016 0.26%
GBP 0.5027 0.0017 0.34%
HKD 6.1250 0.0286 0.47%
JPY 92.6430 -0.2990 -0.32%

Commods

Commodity Price Change Time
Gold Index 1193.4 -0.480 2014-11-20T00:
Oil Brent 78.7 -0.130 2014-11-20T00:
Oil Nymex 75.8 1.320 2014-11-20T00:
Silver Index 16.1 -0.150 2014-11-20T00:

Indices

Symbol Open High Last %
NZX 50 5526.9 5526.9 5526.9 -0.49%
NASDAQ 4655.2 4703.0 4675.7 0.56%
DAX 9460.4 9487.7 9472.8 0.12%
DJI 17677.3 17720.4 17685.7 0.19%
FTSE 6696.6 6696.8 6696.6 -0.26%
HKSE 23353.7 23378.9 23349.6 0.03%
NI225 17285.7 17285.7 17300.9 -1.09%