Insurance cost hike has Tower customers on the run

High-risk, high-spec only: Tower.

High-risk, high-spec only: Tower.

An aerial shot of post-quake Christchurch. File picture

A decision by Tower Insurance to include Gisborne as “a zone at risk of earthquakes and tsunami” and hike insurance premiums here has prompted some residents to immediately switch companies.

Tower signalled earlier this year that it was moving to a “zone” rate for house insurance in “at risk” places like Gisborne, Hawke’s Bay, Wellington and Canterbury.

But when Wainui Beach resident Cliff Blumfield opened his premium notice from the company recently he was flabbergasted to find his premium had jumped up more than 300 percent.

He was even more surprised to find it was because of the “liquefaction risk” at his Wairere Road property in the event of a major earthquake.

Mr Blumfield had been insured with Tower for more than 30 years.

His story follows hard on the heels of news out of Christchurch where a man insured with Tower saw his premium leap up from $2300 to nearly $13,000.

Mr Blumfield said he could not believe it when he opened his premium advice letter.

“I laughed, initially, when I saw my premium had jumped up from $1454 to $4999. It was ridiculous.

“I try not to let things worry me, so I decided straight away to go elsewhere for my house and property insurance.

“The letter stated the reason for the huge increase was the risk of liquefaction on my property in the event of a major quake.”

Mr Blumfield said he cannot follow or accept that reasoning.

“We put a bore down looking for water, went through 24 feet of sand and did not get any water. Then we drilled further through the papa rock and at 34 feet we found water.

“So how is my property at risk of liquefaction?”

He took action immediately after the premium letter arrived.

“I straight away decided that Tower obviously did not want me as a customer any more, so I went through a broker and switched companies.

“I know two other Wainui families who received big insurance premium increases from Tower and they are going elsewhere.”

The Gisborne Herald spoke to a family member from one of those other Wainui families yesterday, who confirmed her premium had doubled.

“The property of another family member had the Tower premium rise from $1400 to $5000 because of the risk-based formula Tower had now applied,” she said.

“It’s not just Wainui either. We have a property in Ormond Road, where the Tower premium has gone up from $1300 to $4000.”

A Gisborne insurance broker said he had dealt with two clients recently who had switched from Tower to other companies — “But we expect more as people receive their renewal notices.

The broker said the people dealt with so far had massive premium increases, of 300 percent and more. Clients he had seen so far had been moved to other companies, to much lower premiums.

Tower chief executive Richard Harding recently said the rises would mostly apply to high-spec homes in high-risk locations.

He told national media about 3 percent of the company’s customers would be affected by rises this year.

  • Tower was approached for comment by The Gisborne Herald, but no comment has been received.

A decision by Tower Insurance to include Gisborne as “a zone at risk of earthquakes and tsunami” and hike insurance premiums here has prompted some residents to immediately switch companies.

Tower signalled earlier this year that it was moving to a “zone” rate for house insurance in “at risk” places like Gisborne, Hawke’s Bay, Wellington and Canterbury.

But when Wainui Beach resident Cliff Blumfield opened his premium notice from the company recently he was flabbergasted to find his premium had jumped up more than 300 percent.

He was even more surprised to find it was because of the “liquefaction risk” at his Wairere Road property in the event of a major earthquake.

Mr Blumfield had been insured with Tower for more than 30 years.

His story follows hard on the heels of news out of Christchurch where a man insured with Tower saw his premium leap up from $2300 to nearly $13,000.

Mr Blumfield said he could not believe it when he opened his premium advice letter.

“I laughed, initially, when I saw my premium had jumped up from $1454 to $4999. It was ridiculous.

“I try not to let things worry me, so I decided straight away to go elsewhere for my house and property insurance.

“The letter stated the reason for the huge increase was the risk of liquefaction on my property in the event of a major quake.”

Mr Blumfield said he cannot follow or accept that reasoning.

“We put a bore down looking for water, went through 24 feet of sand and did not get any water. Then we drilled further through the papa rock and at 34 feet we found water.

“So how is my property at risk of liquefaction?”

He took action immediately after the premium letter arrived.

“I straight away decided that Tower obviously did not want me as a customer any more, so I went through a broker and switched companies.

“I know two other Wainui families who received big insurance premium increases from Tower and they are going elsewhere.”

The Gisborne Herald spoke to a family member from one of those other Wainui families yesterday, who confirmed her premium had doubled.

“The property of another family member had the Tower premium rise from $1400 to $5000 because of the risk-based formula Tower had now applied,” she said.

“It’s not just Wainui either. We have a property in Ormond Road, where the Tower premium has gone up from $1300 to $4000.”

A Gisborne insurance broker said he had dealt with two clients recently who had switched from Tower to other companies — “But we expect more as people receive their renewal notices.

The broker said the people dealt with so far had massive premium increases, of 300 percent and more. Clients he had seen so far had been moved to other companies, to much lower premiums.

Tower chief executive Richard Harding recently said the rises would mostly apply to high-spec homes in high-risk locations.

He told national media about 3 percent of the company’s customers would be affected by rises this year.

  • Tower was approached for comment by The Gisborne Herald, but no comment has been received.
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Peter Jones - 13 days ago
Wake-up call for those who think agenda 21 is not real. If they don't want you living somewhere, by 2030 you will be gone. The UN agenda has 12 years left to bankrupt the nation and clear the population from all areas they have zoned for de-development. All our money is being used to develop a model which is designed to fail so that the agenda can proceed.
If you are the CEO of Tower I guess you can shoulder such an increase but for the common people it means hardship or sayonara.
The ultimate FU is when they red-zone your property and withhold all rights to insurance coverage going forward, such as would likely happen if a tsunami was ever triggered off our coastline.
Remember, if you live somewhere where they don't want human habitation the UN will find a way to get you out of there by 2030.

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