Man dumps home insurance over Tower’s sea surge assessment

A Christchurch man has stopped insuring his home after his annual premiums increased by more than 30 percent, a rise of $1000, due to updated risk pricing that includes factors like sea surge and landslips.

Insurance Premium Increase Sparks Dispute

Tower Insurance factored in the risk of sea surge, landslips, earthquakes, and flooding when calculating the new premium for the Burwood property. The homeowner, Trevor Taylor, disputes the sea surge assessment, stating his home is several kilometers from the coast.

Taylor challenged the assessment but Tower Insurance refused to alter it. He requested the evidence used to assess his property’s risk, but the insurer declined to release specific information, citing commercial sensitivity.

Taylor believes the likelihood of a sea surge impacting his property is negligible, describing the potential path of floodwater as “ridiculous.” He explained the water would need to travel up an estuary and river, breach stopbanks, and flow uphill to reach his home.

While Tower Insurance stated its risk assessment was based on approximately 200 million data points, Taylor’s research suggests the risks are overestimated. He cited Ministry of Environment data indicating storm surges rarely exceed 0.6 metres on open coasts, with a maximum recorded surge of 0.9 metres in Kawhia Harbour in 2013.

Taylor filed a Privacy Act request for all information Tower Insurance holds on his property, but it was denied on the grounds of commercial sensitivity. He expressed frustration with the lack of transparency and suggested a site visit from Tower Insurance representatives would demonstrate the inaccuracy of the assessment.

Taylor also noted a lack of consistent data regarding risk assessments from Environment Canterbury, the council, and other government agencies.

Tower Insurance stated the high sea surge risk rating reflects the potential for flooding through nearby water systems, including the Avon River, Travis Wetland Nature Heritage Park, and Horseshoe Lake. The company noted its assessment aligns with the Christchurch City Council’s flood map, which identifies the property as being in a one-in-200-year flood hazard area.

Tower Insurance indicated that fewer than 10 percent of properties with higher sea surge or landslide risks will experience an increase in their natural hazards premiums. A third of those will see an increase of less than $100 annually, with the majority being less than $300. However, some customers with significantly higher risks will see larger increases.

The insurer maintains that releasing detailed data would not aid customer understanding and is also commercially sensitive. Instead, Tower Insurance simplifies the information into a risk rating.