Owhiro Bay in Wellington is one of the thousands of locations around New Zealand that today have new sea-level rise predictions to come to terms with and the magnitude has stunned even the scientists working on them.

there's one big factor that until today hasn't been included in the calculations, vertical land movement.

there are also constant tiny movements, just millimetres a year.

the insurance sector has long-stressed the need to respond to increased risks that coastal properties face from the impacts of climate change,"

Who will pay?

We’re still building by the coast

Major shift in insurance

COASTAL DEVELOPMENTS exposed to 1-in-100-year events are at risk of becoming uninsurable, and, in some cases, uninhabitable — within the next couple of decades. Small changes in sea levels can significantly increase the reach of coastal storms, and storms are becoming more intense.

Partial or full insurance retreat

The hazard varies by location. Canterbury and Hawke’s Bay have the highest risk exposure, but the challenges are high in other locations too.

Research published in 2020 found that some coastal homes in Wellington and Christchurch will find it difficult or impossible to get house insurance from 2030, with homes in similarly exposed locations in Auckland and Dunedin following only a few years later. In these four cities, at least 10,000 properties may be uninsurable by 2050.

For some existing settlements, choices will have to be made whether to restore natural defences to sea level rise (such as sand dunes or estuaries) or carry out (if possible) a managed retreat of existing buildings, giving up on land that is subject to high levels of flooding or erosion. All of the options have considerable costs. On one of the populated stretches of Hawkes Bay coastline, for example, the cost of work such as sea walls, groynes and managed retreat has been roughly estimated at $130–285 million.

n the past, New Zealanders have built houses and infrastructure very close to the coast. Sea-level rise and storm surges cause coastal erosion which takes sand away from beaches. We are already seeing the impact this process has on coastal developments. Communities will have to decide whether to fortify the coast with structures like seawalls and groynes, or retreat and build further back from the coast.

Two thirds of New Zealanders live within 5 km of the coast, so sea-level rise will directly affect many of us.Sea-level rise is caused by melting of the polar ice caps, as well as expansion of ocean water as it warms. In New Zealand, the sea may rise by up to a metre by the end of the century. This will mean more coastal erosion and flooding, which will damage homes and infrastructure like pipes and roads.

Climate change and warming temperatures are causing sea levels to rise, on average, by 3.5 mm per year. This sea level rise is caused by thermal expansion of the ocean, by melting land based glaciers, and by melting of the Greenland and Antarctic ice sheets.

insurance companies are raising premiums on those more at risk of damage due to climate change.

Increased Homeowners Insurance Costs

Climate-change-induced events have caused homeowners in high-risk areas to pay more for homeowners insurance.

The report points out that there are nearly 44,000 homes less than 1.5 metres above the current average spring high tide. Over 8,000 of those are less than 50cm above the spring high tide mark. With sea levels predicted to rise 30cm by 2065 and increasing storm surges and king tides expected, many of those homes are at risk of frequent inundation or being completely washed away. By 2100, global average sea levels are predicted to rise 1 metre if current carbon emissions levels continue.

EQC premiums are collected by insurers and embedded within residential insurance policies, so if private insurers withdraw, homeowners would have to apply directly to the EQC for catastrophe insurance.

If insurers pull out from providing cover for homes deemed high risk, homeowners will no longer have any protection from the risk that they may lose their major financial asset – which will, in any case, be slashed in value and potentially unmarketable. They may look to the government to provide alternative cover (as has happened in some places overseas), or expect the government to step in should their home be destroyed or rendered uninhabitable.

Current laws in both Australia and New Zealand are hindering adaptation to the effects of climate change.

In 2019, an extensive New Zealand study identified numerous barriers and gaps in the law and recommended many changes to the relevant legislation, mostly the RMA. The RMA includes several barriers to adaptation generally as well as managed retreat in particular. For example, it is not always clear who is responsible for taking particular climate adaptation measures — whether that involves building hard seawalls, imposing conditions on building permits to ensure future resilience, or simply revising where housing and other structures may be built in the face of increasing risks from sea level rise.

There are also strong barriers to adaptation measures that involve interference with existing, permitted land uses. In some cases it does not appear possible to force landowners to move to retreat from the coast in the face of rising sea levels. If they do move, it’s unclear if they are entitled to compensation, and if so, who should pay.