Cyclone Gabrielle insurance: Owners of badly damaged homes can expect write-off – Tower

Flood damage in Esk Valley in Hawke's Bay.

If the flood and mud reach one to two meters, it’s hard to see how the house can be rebuilt, said the Tower’s chief executive.
Photo: RNZ / Tess Brunton

A major insurance company said owners of typhoon-hit homes with meters of stagnant water and contaminated mud can expect write-offs.

Tower has 170,000 home policies on its books, and its chief executive Blair Turnbull said appraising homes with yellow and red stickers was a priority.

“The unfortunate part is if the flood and mud gets to one to two metres, it’s very hard to see how you can rebuild the house,” said Turnbull.

“It will most likely have to be demolished because the land is contaminated, the house is contaminated.”

Meanwhile, two Hawke’s Bay residents who believed their home would be written off said they were surprised their insurance company put a cap on the cost of rebuilding.

Turnbull said there are areas where homes may not continue to be built in New Zealand and Tower is sharing that information with local and central government.

“The key here is that you can mitigate these risks but you also have to recognize these risks and there are places we shouldn’t build,” Turnbull said.

“That is the most important discussion. The data allows us to look and see the area.”

Decisions around managed retreats and future developments need to be made at government level for those in very high risk areas, he said.

Tower will not withdraw from flood-hit areas but some homes will become much more expensive to insure, Turnbull said.

“We’re not going to embargo an area but what we’re highlighting is that if we continue to deal with these escalating weather events, in their frequency and severity, there will be areas that will inevitably struggle for insurance,” he said.

“Obviously it’s not the result we wanted.”

Minister of Finance [

Grant Robertson] said on Sunday decisions needed to be made quickly about whether some places should be rebuilt – before money and resources are wasted on areas that need to be abandoned.

  • If you are in a flood risk area and are facing a large increase in your insurance premiums or have been told you are uninsurable, and would like to share your story with us, please send an email to: [email protected]

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