IAG customers with home and contents insurance may notice some changes in the coming months as premiums include changes in the cover provided by the Earthquake Commission (EQC) and take greater account of natural disaster and severe weather-related risks.
The changes take effect from 1 July and will be communicated to customers throughout the course of the next 12 months, including in their annual policy renewal documentation.
The Government has made changes to the level of cover EQC provides in relation to damage to residential homes and contents from natural disasters.
EQC will cover more of the costs for rectifying damage to residential homes. From 1 July, EQC will pay up to $150,000 plus GST per residential home. However, EQC will no longer provide cover for contents. IAG will provide this to its customers who have contents insurance.
At the same time, IAG is taking more account of risk in its premiums.
Customers who live in areas that are more prone to natural disasters and severe weather events may have to pay more for insurance. Conversely, customers who live in areas that are less prone may pay less.
IAG’s Executive General Manager Customer and Consumer Kevin Hughes says premiums need to reflect the level of risk and costs associated with providing insurance cover, including reinsurance costs.
“Every customer and every property is different and so every policy will be affected differently, whether that be a price increase or decrease.
“We realise these changes will be a challenge for some customers and we will work through this with them.
“There are a range of options available to customers to make this easier, including taking a higher excess or adjusting the frequency of payments to suit them.
“We will continue to provide solutions and work to make insurance as affordable as possible.
“New Zealand’s environmental risks have evolved over the past few years and we need to take more account of those risks, so we can continue to be there for our customers across New Zealand when misfortune strikes.”
Customers of IAG’s brands including AMI, NZI and State will be affected, as will people with insurance through the banks which IAG provides insurance for – ASB, BNZ, The Co-Operative Bank and Westpac.