Councils' insurance deal done
Waikato councils are banking on $300 million of insurance cover being enough to rebuild the region if a catastrophic natural disaster strikes.
Rocketing insurance premium costs after a spate of big Asia-Pacific region claims for natural disasters have prompted 10 Waikato councils to combine their cover for far less than the cost of replacing the region's infrastructure.
Hamilton's underground assets and its six Waikato River bridges remain uninsured, and would leave city ratepayers with a big bill if ever damaged.
Waikato's mayors this week discussed the deal, which means their councils will collectively save $688,000 this financial year through new, combined insurance arrangements with insurers AON New Zealand.
Hamilton City Council's audit and risk committee was briefed yesterday on the deal, which council performance general manager Blair Bowcott said meant the councils' total cover was set at $150 million, with Hamilton City and Waikato Regional Council stumping up another $150m.
Hamilton Mayor and regional mayoral forum deputy chair Julie Hardaker said the deal was a way of working together to save ratepayers' money.
Waikato District Council chief executive Gavin Ion said the majority of the premium savings, which followed a decision by the 10 Waikato councils to jointly tender their insurance renewal programmes, would be ongoing.
The cover is based on shifting from replacement cost to maximum probable loss, an estimate of the biggest loss which may result from a catastrophe.
It means that for $959m of assets Hamilton has $150m of collective cover and an additional layer of $150m cover, with the councils to purchase more insurance to reinstate the collective's coverage if they make a claim.
Mr Bowcott said insuring the city's underground assets and the bridges would be addressed later.