The Insurance Brokers Association of New Zealand has urged the government to establish a public, centrally managed database of properties carrying Section 72 natural hazard notices.
IBANZ chief executive Katherine Wilson said the register would enhance information accessibility and transparency around these properties.
Section 72 notices are attached to property titles by councils when building consent is issued for properties known to face or be vulnerable to natural hazards. These hazards include erosion, falling debris, subsidence, inundation, and slippage. The notices inform banks, insurers, lenders and purchasers of the natural hazard risk.
Wilson said the implications of Section 72 notices are not widely understood. She said homeowners commonly learn about a Section 72 notice on their property only at the point of selling or filing an insurance claim.
The Natural Hazards Commission can decline claims fully or in part on properties with Section 72 notices. Private insurers typically only pay claims once the commission accepts its portion, potentially leaving homeowners uninsured for specified natural hazard risks. The commission currently covers $300,000 towards rebuilding or repairing a residential home per natural hazard event.
IBANZ also urged the government to run a public education campaign to improve awareness and understanding of Section 72 notices.