Will inexperienced constructing have an effect on home insurance premiums? – insurance business
The report noted that it is important to be "well informed and prepared" to ensure greener building can be promoted and that reinsurers need a "robust framework with clear responsibilities" in order to achieve good standards and practices , maintain and enforce.
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Ronald Mudaliar, Chief Underwriting Officer of Tower Insurance, said that collecting data on sustainable construction will be a key priority for Tower over the next few years, especially as it begins to incentivize customers to use more sustainable materials in their construction activities .
"We are working with a number of universities, including the University of Waikato, on climate change issues and trying to understand what impact we could have in New Zealand," said Mudaliar.
"The idea is really to locate it and see how we can get some of this information we have available for private businesses and make it available to our customers so they can understand their own property."
"Sustainability is a pretty broad topic and people often want to know more about it, but if you can give them information that specifically affects them and their home, they'll appreciate it more and have more incentive to respond," he said.
"In FY22 we will be working to provide our own customers with more information about specific homes so that they can use it for themselves and fully understand their risks related to earthquakes, floods, wind damage, etc."
In terms of risk levels and premiums, Mudaliar noted that there is simply not enough data on these materials to make calls. However, he said that over time and data, there will be increasing tendencies that the use of certain materials will reduce the severity of certain risks – which can ultimately be reflected in the overall premium.
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"As we go through it and build a larger portfolio of houses built with different materials, we will definitely look at the risk profiles as well," Mudaliar said.
"It's all about the size of the pool we can get, and if a bigger pool of data comes through, we can better understand the impact on our portfolios and decide whether we can actually change the ratings on certain types of stocks."
"We already have building information on each of our houses with details of walls, roofs, flooring materials, etc.," he explained.
“If that changes and we get more information about the materials we use, we can see how that affects our cost of damage, as well as the impact of damage. We can perhaps say that certain materials make fire or flood damage less costly and that will definitely affect our premiums. "
Tower Insurance recently offered an added benefit of $ 15,000 to customers looking to incorporate sustainable materials into their renovations after a total write-off. Mudaliar said the move would remove some of the cost pressures associated with sustainable building and is aimed at increasing the overall scope of "green building" in New Zealand.
“From a customer perspective, they have the option to spend a little more money on the house without sacrificing what they already have,” he said.
“They already have a sum insured and work on it without worrying about cutting other costs to have those extra parts. It is a win for the customers and also for us on our way to sustainability. "