The recent news of AA Insurance pulling out of Westport highlights a growing reality across New Zealand: insurers are increasingly limiting or pausing cover in higher-risk areas due to flooding and climate-related events.
AA Insurance has stopped offering new home and landlord policies for parts of Westport because of the town’s significant flood risk, even though existing policies remain in place. This is widely expected to be the first of many similar decisions around the country.
Why this matters for buyers everywhere:
If you cannot secure insurance, your lender is unlikely to advance the loan. Without funding, you may be unable to complete the purchase, putting you at risk of default and serious financial consequences.
Even if you do complete the purchase, without insurance you carry the full risk of damage yourself.
Our strong recommendation:
Before going unconditional on any property purchase (not just in Westport), buyers should:
- Confirm insurance is available for that specific property
- Ensure cover is acceptable to their lender
- Understand any exclusions, excesses, or future renewal risks
Insurance is no longer a box-ticking exercise - it’s a critical due diligence step.
If you’re buying, talk to your lawyer and your insurer early. It could save you from a very expensive surprise.
Need advice? Call us on 0800 277 529 or email zoe.summerville@aspiringlaw.co.nz.
Link to this article: https://www.rnz.co.nz/news/national/585268/insurer-temporarily-halts-new-policies-in-westport-due-to-flood-risk
