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AMI clients face hefty premium rises after quake

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  • AMI clients face hefty premium rises after quake

    AMI clients face hefty premium rises after quake

    By Christopher Adams
    5:30 AM Thursday Jun 9, 2011
    Photo / Natalie Slade


    AMI Insurance, which has faced a crisis after Christchurch's February earthquake, has confirmed that its customers are facing big rises to their premiums.
    John Balmforth, AMI's chief executive, said policy holders would face average price increases of up to 20 per cent for dwellings, 15 per cent for contents and 4 to 5 per cent for vehicles.
    The increases would be larger for South Island customers than for those in other parts of New Zealand, he said, as policy holders from that part of the country had previously paid lower premiums. 'It's a catch-up situation."
    He said there would be an obvious financial impact on customers, but some of AMI's competitors were making even larger increases.
    Interest.co.nz has reported that AA Insurance is increasing its home premiums by an average of 50 per cent.

    Read more at the Granny.
    http://www.nzherald.co.nz/business/n...ectid=10731090
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    I happen to have just received the annual bill for our PPOR - an increase of 61%. Our area of Christchurch was hit by liquefaction in Feb only - the roads were knackered but the houses are in pretty good shape. I don't know how much they're tweaking things by suburb or if it's a standard rise for Christchurch as a whole. Or maybe building type/size has an effect? Would be interesting to hear from others when they get bills.

    It's a 65% increase at first glance but some of that is the increase in the GST rate from this time last year. (I hope I've got the sums right, it's been a long day. I'm sure somebody will correct me if not.)

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    • #3
      Oh well, looks like AMI will be out of business soon.
      Even if they are cheapest I am not going to go with them on principle from here in

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      • #4
        Well, time for a ring around again, but AMI used to be the only people who would insure houses (for replacement value) that still have lath & plaster inside. Taking that off isn't really an option. Our quake damage isn't that bad - well, except in one room of 4 that have lath & plaster, and we've been advised to have that gibbed over rather than taken off.

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        • #5
          I suspect that all Insurance Companies will be looking at the same sort of price rises, higher for Christchurch than the rest of the country but nobody will be spared.
          It could be worse - one or possibly all could flatly refuse to insure Christchurch property at any price.

          At least AMI is now a defacto Crown entity underwritten by the taxpayer.

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          • #6
            Don't think it is even possible to change insurance company here yet. I'm with Tower and they insured my lath and plaster PPOR. That is likely to all be going with the repair work. Probably in the 100K+ category. Waiting on the EQC report before Tower can do anything. Meanwhile the house is slowing breaking in half.

            Anyway, AMI is hardly going to be the only company to put up premiums. All will be increasing significantly and it's far too early to pick what effect the world's run of disasters will have.

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            • #7
              Originally posted by flyernzl View Post
              It could be worse - one or possibly all could flatly refuse to insure Christchurch property at any price.
              That's exactly where we are ATM. For all of Canterbury if not the entire South Island. Makes buying property difficult though you can usually take over the vendor's policy. They are accepting renewals of existing policies.

              Not sure how new builds are working with insurance.

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              • #8
                Originally posted by ream View Post
                well, except in one room of 4 that have lath & plaster, and we've been advised to have that gibbed over rather than taken off.
                HI Ream.

                If you have a wall which is an exterior wall in that room, take this opportunity to have the lath & plaster removed and put batts in.
                www.3888444.co.nz
                Facebook Page

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                • #9
                  Good point. Except we already did airfoam round the whole house a few years ago (and it made a big difference). I hate to think how cold the kids' rooms would be if we hadn't, even without being able to see daylight through the walls.

                  DazRaz, did you manage to get replacement from Tower rather than indemnity? Nice work, we were with them originally but they wouldn't play ball unless we re-gibbed, re-roofed, re-piled, re-wired and re-plumbed.
                  Last edited by ream; 10-06-2011, 10:46 AM. Reason: Added re-wiring - had forgotten that one.

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                  • #10
                    Tower are now taking on new business but would require a structural engineer's report (due to having some existing damage however slight) and would not offer replacement policy 'until' re-lined.

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                    • #11
                      AMI were the cheapest by a country mile for my car, house & content - this I know b/c I went thru the utterly painful exercise of comparing several companies. Looks like AMI's business model wasn't anticipating a natural disaster of this scale, and this has been proven by their almost-collapse and bailout.

                      So no doubt they'll lift their prices. Looks like I'm going to have to go thru the painful exercise again. Will be mighty frustrating if they again prove cheaper than the competition.

                      If insurance becomes too expensive, and it's getting there now, it won't be long before larger numbers of people just won't bother. 1st out the door - car insurance. Then contents.

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                      • #12
                        On the other hand, we're talking an increase of a couple of hundred bucks for a year, and we all now have a much greater awareness and (dare I say it) fear factor of how much damage can actually happen to a property. For property investors it should still be a no brainer even if not required by the bank.

                        Some owners in certain eastern suburbs however obviously have no chance of paying for it now when they couldn't before (even if their properties are insurable - who knows still?), and I'm sure you're right, some in between will decide it's now more than they can afford. It wouldn't be my choice of what to cut back though. I know some of our tenants had to use the Red Cross money to replace their contents as they didn't have insurance.

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                        • #13
                          Looks like AMI's business model wasn't anticipating a natural disaster of this scale,
                          Neither were any of the others.
                          "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                          • #14
                            Perhaps they should have been insured?
                            The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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                            • #15
                              Originally posted by PC View Post
                              Perhaps they should have been insured?
                              Precisely PC, precisely.

                              Choose the right insurer
                              REBECCA STEVENSON

                              With the recent collapse of several small insurers and the Government's $500 million support package for the heavily Christchurch-exposed AMI Insurance, you may want to look a little closer at the business behind your assets' security blanket.

                              http://www.stuff.co.nz/business/mone...-right-insurer

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