Homeowners in Canterbury, New Zealand are facing aftershocks of a financial kind, following the earthquake that struck the area, as the areas insurers hike the rates by up to 30 percent.
Insurance companies were slammed by claims for damage from the quake, and by fees from international reinsurers. These insurers say that they are working hard to balance the tremendous costs against their dedication to keeping prices as affordable as possible.
However, the most recent renewals for policies, where the terms begin February 1 or afterward, will also include an annual increase of $120 (plus GST), which will be gathered for the Earthquake Commission.
Homeowners’ associations are warning property owners about these surprises, which will soon await them in their mailboxes, while some industry representatives are saying that the reason that the premiums are as they are is that they are attempting to keep the prices manageable. Several of the policy renewals – especially among those which occurred in the middle of 2011 or earlier – will not be effected by the increase, yet.
At the same time, though, other homeowners will face insurance bills that are hundreds of dollars higher, with cases where the expense will have raised by over 50 percent. For example, in the areas of Hamilton and Remuera, there were two homes (five bedroom) that experienced a premiums increase of over $300. Similarly, a two-bedroom home located in Mt. Eden saw an insurance rise of 56 percent.
Kim Willems, the president of the Canterbury Property Investors Association, has said that these increases on renewal will be “quite a shock” and that they could be devastating.
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