IAG is following through with its plans to hike insurance premiums in Wellington.

After a mayoral forum on insurance in Wellington on Monday morning, industry representatives remained steadfast on policies and premiums that could see many of the city's resident struggle to insure their homes and apartments.

Insurance Council Chief Executive Tim Grafton said sharper premiums for homes built on less-resilient land were "not something we should be backing away from" because they  discouraged people  from building  on land prone to earthquakes and sea level rises.

 

"We can duck and dive and we can invent everything else we want to but sustainable insurance cover at an affordable rate depends on a resilient city."

IAG stakeholder relations manager Bryce Davies said his company planned to continue moves to risk-based pricing that would see premiums rise in places of high seismic activity such as Wellington. 

"In all the other parts of the country where there's lower seismic risk we're giving customers decreases," Davies said. "Ultimately we want people and property to be in safe locations."

John Milford, Chief Executive of Wellington Chamber of Commerce, said rising insurance premiums had also hit businesses hard.

Owners of an office block in Wellington had seen their insurance premiums rise 220 per cent in four years from $99,000 in 2016 to $320,000. 

Apartment owners in Wellington are facing big insurance hikes.

Body corporates in the capital have been badly hit by the moves with one choosing to carry no natural disaster insurance at all, Inner City Wellington spokeswoman Geraldine Murphy told Stuff.

Banks require insurance to lend on mortgages, making uninsured properties and apartment blocks difficult to sell. 

DILEEPA FONSEKA/STUFF

The scheme was originally meant to fund a full rebuild of a person's home but carried a cap on claims of $100,000.

Rebuilding the average family home today would cost four times that, he said.

The government has announced plans to raise the EQC cap to $150,000but Middleton believed  it needed to be $400,000. 

 

People around the country pay earthquake levies which go into a natural disaster fund to cover earthquake damage on homes.

Middleton believed raising the cap would quickly decrease insurance premiums, as insurers would only have to insure over that $400,000 amount.

But it would also mean the government would carry a large liability if an earthquake took place as there would not be enough in the fund to fully cover the amounts insured.

 

Mayor Justin Lester said 150 people from the construction industry, insurance, body corporates, and government, attended Monday's forum.

As a next step, a taskforce would be created out of the forum as a "starting point" on the issue.

Wellington City Councillor Iona Pannett said there was a clear message out of Monday's forum: "We need to stop building in bad places."

The council was only worsening the problem by continuing to build and consent developments on less resilient land, she said.

"We are still making bad decisions in this city."

Stuff