Relief for insurance dead zone

00:05, Jul 26 2013

Relief could be on the horizon for those in need of house insurance, with signs the market is beginning to open up again in Marlborough and Wellington.

Kiwibank said yesterday that it would accept applications for new house insurance policies in those regions again.

The central North Island had been declared an exclusion zone by some insurers immediately after a magnitude 6.5 earthquake on Sunday night.

Kiwibank head of insurance David Chamberlain said the exclusion zone severely affected the ability of people to buy and sell houses, and to have adequate security in the event of further quakes.

Insurance Council spokesman Terry Jordan said Kiwibank's move was a positive sign that the insurance ring-fence was about to come down.

"My understanding is that there is insurance available from some insurers and this announcement by Kiwibank may be the initial stages of the market opening back up again."

Putting an exclusion zone in place was standard practice after a big earthquake, he said. Insurance companies did not want to expose themselves to greater levels of loss and were also contractually obliged to protect their reinsurers from greater losses.

The Canterbury experience was still fresh in insurers' minds, he said. Insurers there were just starting to accept new business after the September 2010 earthquake when the more devastating February 2011 quake struck.


The Marlborough Express