Can You Insure It? The NZ Buyer's Guide to Property Insurability | Shire Property Blog

Before we begin: This article provides general information about property insurability in New Zealand. Every property and situation is different. We strongly recommend discussing your specific circumstances with qualified professionals, including your lawyer, insurance broker, and building inspector.

The Hidden Risk Nobody Talks About

You've found the perfect property. The price is right, the location works, and you're ready to make an offer. But there's a question you might not have thought to ask: can you actually insure this property?

In 2026, this question has never been more important. With climate-related events increasing and insurers reassessing their risk exposure, some New Zealand properties are becoming difficult or impossible to insure. Just this week, AA Insurance stopped offering new home insurance policies in Blenheim, following similar decisions in Westport and parts of greater Christchurch.

In many cases, difficulty obtaining insurance can affect your ability to secure a mortgage. And purchasing without adequate insurance means carrying significant financial risk.

Why Properties Become Uninsurable

Insurance companies assess risk. When that risk becomes too high — or too unpredictable — they either price it accordingly or stop offering cover altogether. The Insurance Council of New Zealand outlines the main varieties of house insurance, but availability depends heavily on property-specific risk factors. Here's what makes a property a red flag for insurers:

Flood Zones

Properties in designated flood zones face increasing scrutiny. A 1-in-100-year flood zone might sound safe, but climate change is rewriting these calculations. According to The Treasury's review on residential insurance, underlying flood risk is increasing due to climate change, challenging the insurability of some homes. Many insurers are now factoring in a 20-30% increase in rainfall intensity when assessing flood risk.

If a property has a history of flooding, or sits in an area where flooding is likely, you may face:

Higher premiums (sometimes 2-3x normal rates)
Flood exclusions on your policy
Complete refusal of cover

Coastal Erosion

New Zealand has thousands of kilometres of coastline, and much of it is eroding. Properties near cliffs, beaches, or low-lying coastal areas may become uninsurable as sea levels rise and storm surges intensify.

The Natural Hazards Commission (NHC) doesn't cover land damage from coastal erosion — only from storms and floods. This leaves many coastal property owners exposed.

Previous Claims History

A property that has made multiple claims — especially for water damage, flooding, or weather events — develops a claims history that follows the address, not the owner. Insurers track this, and a property with a poor claims record may be difficult to insure regardless of who owns it.

Weathertightness Issues

New Zealand's leaky building crisis affected homes built between 1990 and 2004. Properties with known weathertightness issues, or those that match the high-risk profile (monolithic cladding, flat roofs, Mediterranean-style designs), may face insurance exclusions for weather-related damage.

Earthquake-Prone Status

Properties in high seismic zones, or buildings designated as earthquake-prone, face their own insurance challenges. While EQC provides some cover, private insurers may add exclusions or increase premiums significantly.

Things to Consider When Checking Insurability

Many buyers find it helpful to investigate insurance availability before going unconditional. Here are some steps you may want to discuss with your lawyer and insurance broker:

1. Consider Obtaining a LIM Report Early

The Land Information Memorandum (LIM) from your local council is a primary source of hazard information. It can tell you if the property is in:

A flood zone (and what category)
A coastal hazard area
An erosion risk zone
A tsunami inundation zone
Any other identified natural hazard area

As Settled.govt.nz advises, be aware that insurance premiums may increase, exclusions may be added, or cover may be withdrawn as risk changes. Some buyers find it helpful to obtain the LIM early in their due diligence process to allow time for further investigation if needed.

2. Review the Certificate of Title

It may be worth checking for Section 72 and Section 73 notices under the Building Act. These are formal warnings placed on titles when a building consent was issued despite known natural hazard risks. Your lawyer can help you understand what these mean for your situation.

3. Consider Running Insurance Quotes Early

Some buyers find it helpful to request quotes from major insurers before committing to a property. This can indicate whether cover is likely to be available and at what cost.

If insurers are unable to offer cover, this is typically worth discussing with your lawyer and insurance broker to understand your options.

4. Ask Your Insurance Broker About Claims History

An insurance broker may be able to help you understand if a property has a claims history that could affect insurability. Some insurers maintain databases of properties based on previous claims.

5. Consider Checking Council Flood Maps

Most councils publish flood hazard maps online showing modelled flood extents for different scenarios (1-in-10 year, 1-in-50 year, 1-in-100 year events). Rothbury Insurance notes that council-identified hazard risks will typically be included in the LIM report — but checking flood maps directly may reveal additional information about potential future risk.

6. Consider Researching Historical Weather Events

Some buyers research whether the property or area has flooded before. Local news archives, council records, and conversations with neighbours may reveal historical flooding that might not appear in official records.

Discussing Insurance Conditions With Your Lawyer

If you're buying a property with potential insurability concerns, you may want to discuss with your lawyer whether an insurance condition in your sale and purchase agreement is appropriate for your situation. Such a condition can provide the right to cancel the contract if satisfactory insurance cannot be obtained.

Standard agreements often include a general insurance clause. Your lawyer can advise whether this is sufficient for your circumstances, or whether additional protections might be appropriate. Considerations may include:

Adequate time to obtain quotes
The ability to exit if insurance is unavailable, prohibitively expensive, or excludes significant risks
Flexibility regarding the terms of available cover

Many professionals recommend confirming insurance availability before going unconditional. As Law News NZ highlights, some properties with insurability challenges are on the market without this being immediately apparent to buyers.

What If a Property Has Insurance Challenges?

Sometimes you may find a property you're interested in that has insurance challenges. Here are some options that buyers in this situation have considered — though you should discuss your specific circumstances with your professional advisors:

Accepting the Risk

Some buyers, particularly those purchasing with cash, choose to proceed without full insurance or to self-insure. This involves significant financial risk and is a decision that warrants careful consideration. Questions to consider with your advisors: could you afford to rebuild the property from scratch if it was destroyed? Could you cover major repair bills from weather events?

Negotiating the Price

Insurance challenges may be a factor in determining a property's value. Your lawyer or real estate professional can advise whether this is relevant to your negotiations.

Walking Away

In some cases, buyers decide that the risks outweigh the benefits. This is a personal decision that depends on your individual circumstances, risk tolerance, and financial situation.

Investigating Remediation

In some cases, it may be possible to improve a property's insurability through remediation work — such as raising a house above flood level, improving drainage, or addressing weathertightness issues. Professional advice from qualified building professionals, along with quotes for any work, can help you understand whether this is viable before committing.

Areas That May Warrant Additional Due Diligence

Based on recent news reports and industry commentary, some areas have seen increased scrutiny from insurers. These may include:

Low-lying coastal areas throughout New Zealand
River floodplains, especially in areas that experienced flooding in 2023-2025
Parts of Marlborough, particularly around Blenheim where insurers have recently tightened availability
Wellington hillsides with known slip risk
Auckland's flood-affected suburbs from the 2023 Anniversary Weekend floods
Hawke's Bay following Cyclone Gabrielle impacts

This list isn't exhaustive and reflects publicly available information at the time of writing. Climate risk is evolving, and your insurance broker and lawyer can provide current advice relevant to your specific property and situation.

Key Takeaways

Insurance is a significant consideration in property ownership in New Zealand. Difficulty obtaining insurance can affect your ability to secure financing and may expose you to financial risk.

Some things to consider discussing with your professional advisors:

Obtaining the LIM early to review hazard information
Checking insurance availability by requesting quotes from insurers
Whether an insurance condition in your agreement is appropriate
The timing of going unconditional relative to confirming insurance

Many buyers find that investigating insurability during the due diligence period — while they still have options — helps them make more informed decisions.

Shire Property helps buyers understand what they're getting into before committing. Our platform analyses LIM reports, titles, and property documents to surface risks — including potential insurance red flags. Start your property research today.

This article is for general information only and does not constitute legal, financial, or professional advice. Always consult qualified professionals before making property decisions.