Wild weather in 2013 causes highest insurance costs in nine years

Tim Grafton, CEO of Insurance Council of New Zealand

Damage from wild weather last year cost over $174 million in insured weather-related damages, making it the second most expensive year on record according to the Insurance Council of New Zealand.

September's nationwide storm was the year's biggest cause of damages, and the third most expensive storm in the past 45 years, causing $74.5 million of insured losses, the council said. Commercial property damages made up the bulk of the losses, costing $42 million and a further $3.1 million payment for business interruptions. Residential losses were $18 million and car damage was $9.5 million.

The April Bay of Plenty and Nelson storms and floods cost $46.2 million in insured losses, while the July and August Cook Strait earthquakes cost a combined $31.1 million. Provisional losses for the October storm stood at $10.2 million.

Last year's costs are only trumped by 2004 insured damages of $181 million, inflation adjusted as at 2011.

Last year's high costs "further reinforces the value of insurance in safeguarding New Zealand by being able to meet costs of this scale," Insurance Council chief executive Tim Grafton said in the statement.

The council is made up of 29 members, including Tower, AA and IAG, who currently insure about $550 billion of New Zealand assets and paid out $2.2 billion in claims in 2012.

(BusinessDesk)

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