Monday 27th June 2011
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Earthquake-hit Christchurch and Waimakariri councils are in danger of having no property insurance when their policies run out on Thursday.
Civic Assurance, which is wholly-owned by territorial and regional authorities and insures most councils, will not be offering property insurance for any councils after June 30. It is facing quake-related claims for $750 million.
Civic chief executive Tim Sole said the company could not buy reinsurance.
Last year Civic paid a premium of $7.5m for reinsurance cover, and the reinsurers were now having to pay $750m.
"They've been incredibly badly burned. Some of them are not offering reinsurance in New Zealand at all, and they're not going to renew this policy," Sole told Radio NZ today.
If Civic were to continue after June 30 offering insurance cover without reinsurance, then it might have a problem meeting future claims.
"So that's why we're not offering further property insurance ... for any council in New Zealand, because we have no reinsurance," Sole said.
Councils other than Christchurch and Waimakariri would be able to get cover from other insurance companies that had reinsurance, but it would cost much more.
Civic had done its best to help Christchurch and Waimakariri to find other insurance, but reinsurers did not want to take them on.
"I would say they would struggle deeply to get cover and they will have to turn to government to provide that cover."
Civic would look for reinsurance for next year, and expected to start offering property insurance again.
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