How this Earthquake has Affected Insurance

It’s that time of the year again ... earthquake season. And Graham points out that the ground moving beneath us isn’t the only thing to be concerned about if you’re a homeowner.

As of today (Tuesday 16 November), while recent events cause us to again think about house insurance, there is an embargo against any new house insurance being issued by New Zealand insurance companies. This will remain in place until the powers that be work out what is what in regard to the on-going earthquake issues.

The implication of this is that you can only buy a new house if you can get the existing insurance that is on the property transferred across to the new owner’s name. If you can't, then banks won’t release mortgage funds. This is not a new situation as it occurred in Christchurch and also in Wellington following our last big shake.

The way forward will become increasingly clear over the next few days as the aftershocks hopefully abate.

For all of us who are a little exhausted after the last few days there are lessons to act upon. On a practical level, photograph all the relevant damage in your property, things like cracks and shifting. Go over the house a couple of times as we often miss damage at a first glance.

Finally, we’d like to send our love and support to all those in the South Island who have been seriously affected and those in Wellington who can’t get back into their homes or offices.

 

Graham Goodisson is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.