[ad_1]
Owners of West Auckland homes inundated in January flooding have hailed the Government’s roughly $1 billion plan to offer to buy their homes as “historic” and “hope-inducing”.
In a move echoing the creation of the earthquake Red Zone in Christchurch, the Government plans to partner with local councils to make offers to buy “category three” homes so at risk of future flooding they are no longer safe to live in.
Homes hit by flooding in January and February in Auckland, Hawke’s Bay, Gisborne, and other localities have been categorised as either category one (still safe to live in), category two (can be lived in, providing flood mitigation work is done), or category three (too dangerous to live in).
About 700 homes have been designated category three, with around 400 of them in Auckland.
Lyall Carter, chairperson of the West Auckland Is Flooding (WAIF) group of homeowners, said details of the buyout scheme were yet to be announced, including the prices homeowners would be offered.
But he said the plan marked a historic moment for flood victims in Auckland and in other regions.
“This is a turning point in the road for how we live with nature,” Carter said.
Tim Grafton, chief executive of the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa, suggested category three homeowners might be wise to “preserve” any claims money they were paid by their insurers.
It was up to the Government to decide on its buyout offer, Grafton said, but the Red Zone offers had factored in the money insurers paid to owners.
Grafton said insurance payments were a contractual obligation between insurer and policyholder, but, he said: “If you do end up being cash settled, be mindful of preserving your funds, so you can use them for the most appropriate way forward.”
Carter said the most important thing for category three homeowners was they retained the ability to own a property.
He would be surprised if the buyout offers did not factor in insurance claims as the buyout scheme needed to be fair to both taxpayers, and homeowners.
Grafton said the Government’s announcement would provide certainty for many homeowners, though some would not have all the information they need to make decisions for some time.
Contact with Auckland homeowners on the categorisations of their homes was not expected to begin until June 12.
The Government’s announcement made things clear for owners of category one homes, Grafton said, and they could now get on with repairing them.
“For those customers that have been notified their property is in a category one area, meaning councils won’t require additional work beyond returning things to how they were before, this will provide the certainty to proceed with their recovery,” he said.
“For those properties in category two areas, additional work is required to reduce risks at either a property or community level. Your insurer will continue to settle your claim as your insurance policy provides coverage for the physical damage incurred under your policy,” Grafton said.
Some homeowners are nervous that they could face problems keeping affordable insurance cover for their homes.
Grafton said after floods in Westport and Nelson insurers had continued to insure people whose home had flooded.
However, he could not guarantee that insurers would continue to provide insurance to homeowners at the same price, and on the same terms and conditions as before the flooding.
If flood mitigation work was needed by local councils to secure people’s homes, such as building stop banks, or water catchment ponds, it needed to happen in a timely manner, Grafton said.
Until that work was done, insurers would be carrying the risk of future floods.
Cyclone Recovery Minister Grant Robertson said the buyout scheme would be voluntary, and noted that several people continued to live in Christchurch’s Red Zone.
Grafton did not think insurers would continue to insure any properties that have been designated category three, if people decided not to take the Government’s buyout offer.
Dean MacGregor, executive general manager claims at IAG, which owns the State, NZI and AMI brands, said: “For those with properties in category three areas, where it is deemed there is an unacceptable risk of future flooding, and therefore it is no longer safe to live there, customers will be cash settled as per their policy, so they can make decisions on their next steps.”
Combined, the late January storm, and February’s Cyclone Gabrielle, resulted in more than 100,000 claims with an estimated value to date of over $2.8 billion, Grafton said.
Carter hoped that category three offers would be made quickly, so people could move on with their lives.
He worried some owners of category two homes might find themselves waiting a long time for community-level flood mitigation to happen.
Time is not on the side of people forced out of their homes by flooding. Not only are they coping with the same rising mortgage rates and high inflation, but they are having to pay rent for temporary homes until their homes are repaired, or the Government buys them out.
WAIF has written to the Government and opposition parties asking for help as their insurance cover for accommodation is running out.
The group says some homeowners’ insurance had as little as 25 weeks of accommodation cover, which pays the cost of alternative accommodation while their homes are being made habitable again.
[ad_2]