NZ Government Land categorisation

The release of land categorisation areas is an important step in offering more certainty for those of our customers and the broader communities seriously impacted by the recent extreme weather, cyclone and floods.
If you have been impacted by these announcements, we remain committed to supporting you throughout this process and will continue to update the below FAQs as we know more.

Initial risk categories and definitions
FAQs
FAQs: Relating to claims if you have been given a provisional Category 2 or 3 rating
FAQs: Some additional FAQs if you have been given a confirmed Category 3 rating in the Hawkes Bay

Initial risk categories and definitions:

Repair to previous state is all that is required to manage future severe weather event risk.

Community level interventions are effective in managing future severe weather event risk.

Property level interventions are needed to manage future severe weather event risk, including in tandem with community level interventions.

Potential to fall within 2C/2P but sigificant further assessment required.

Future severe weather event risk cannot be sufficiently mitigated. In some cases some current land uses may remain acceptable, while for others there is an intolerable risk of injury or death.

Minor flood damage to repair but no need for significant redesign/retrofitting.

Local government repairs and enhances flood protection schemes to adequately manage the risk of future flooding events in the face of climate change effects.

Property specific measures are necessary e.g., improved drainage, raising houses is necessary. Benefits accrue to property owners but some may face affordability issues.

Interventions may be required / possible but insufficient information to provide initial categorisation (these may subsequently move between "2" categories or to categories 1 / 3).

In the face of enhanced climate risks the property may face unacceptable risk of future flooding. Other property could be subject to unstable land that poses an ongoing risk.

FAQs:

The process of land categorisation and buy-outs for properties badly damaged by Cyclone Gabrielle and the 2023 Auckland Floods is being managed by the relevant Councils.

While insurers do not have any direct involvement in the process, we know it is an important step in giving more certainty to our customers and their broader communities.

We are on hand to help our customers with any documents related to their insurance claim that your Council asks you to provide.

The Government’s land categorisation process is separate to the insurance process.

The calculation of your insurance claim is based on how much it would cost to repair any damage to your property, and the final land categorisation of your home has no direct impact on how much your insurance payout will be.

However, the final categorisation of your home may have an impact on how your claim can be settled, and your insurance settlement may have an impact on the offer you receive if your property is subject to the buy-out process.

We have included some answers to FAQs below. However, the information on this page is of a general nature only, and is intended to provide guidance about how a claim might be managed and things for you to consider. The steps which will be taken to manage your particular claim will depend upon your individual circumstances and your policy wording. To discuss the options available for your specific property, contact your Broker or call Vero on 0800 800 134.

Category 1

If the Government and/or local council have indicated your property is in a Category 1 Low Risk area, from an insurance perspective your claim will continue to progress as normal, and your insurance will remain available.

Category 2

If the Government and/or local council have indicated your property is in a Category 2 Managed Risk area, additional community or property-level intervention may be required to manage any potential future risk. This may include, for example, improving and repairing community stopbanks or improving stormwater infrastructure to limit the impact of flooding. As more information becomes available from the government and/or your local council (such as timeframes, funding available, etc.), we will work with you directly to understand the best way to approach your claim. The categorisation of your property as Managed Risk does not change your entitlements under your policy. It’s important to note that your Home Insurance Policy only provides cover to repair or rebuild your home back to the condition it was prior to the loss or damage. This means any intervention or improvements to manage future risk is not covered under your policy, however we will work alongside you to find the most appropriate solution. See further FAQs below that cover additional scenarios in relation to Category 2.

Category 3

If the Government and/or local council have indicated your property is in a Category 3 High Risk area, this could mean repairs to your home or rebuilding your home in the same area cannot progress due to the risk of future impacts from severe weather events. The categorisation of your property as High Risk does not change your entitlements for an existing claim under your policy.

If your property is subject to a buy-out offer from your local Council, we will work with you to supply all insurance documentation required by the Council as part of this process.

Vero will not continue providing insurance cover to category 3 residential homes that have received a Buyout offer, as they are known to have exposure to ongoing and expected flood issues. If you do not sell your property to the Council, your insurance will be cancelled on the date you decline the Council’s offer, or the date the Council’s offer expires, whichever occurs first.

We will work with you directly to determine the best way forward, and we acknowledge that continuing with repairs may not be the best option. We need further information, including formal confirmation of categories at property level before we can discuss the best next steps for you

Please be aware that we are yet to receive the categorisation data at property level and need to work through this to understand the best options for all of our impacted customers. This will take time, and we’ll be in touch with you as soon as we can with an update.

We understand you may disagree with the Council’s assessment of your property. If this is the case, you will need to engage in consultation, or lodge a dispute, with your local Council directly via the channel(s) they provide.

Hawkes Bay

If you’d like more information on the Hawkes Bay categorisation and consultation process, we recommend you contact the council on 0800 117 672 or visit: www.landcategoryhb.govt.nz .

Auckland

For information on Auckland Council’s categorisation process or to contact the Council, visit: Property categorisation and resolution in storm affected areas (aucklandcouncil.govt.nz)

Hawkes Bay

The Hawkes Bay Category 3 Buyout Programme only applies to properties on which one or more dwelling was located as at 13 February 2023. Options for rural properties that have a dwelling on category 3 land differ depending on whether they are more or less than 2har. For more information about the Hawkes Bay Buyout Programme, please see Category 3 Voluntary Buy-out Programme | Hastings District Council (hastingsdc.govt.nz).

Areas other than Hawkes Bay

We're keeping up to date with information as it becomes available from central and local government, and where possible, we will work with any relevant local council and government agencies to understand further developments that may affect your policies with us. If you'd like more information on the categorisation and consultation process, we recommend you please contact your local council

FAQs:

Some additional FAQs relating to claims if you have been given a provisional Category 2 or 3 rating

If your property is Category 2, a managed repair may no longer work for you. Speak to your project manager to find out whether your repair can be safely paused. The contractor may need to complete some of the work before pausing the repairs in order to make the property safe and weathertight.

To discuss the options available for your specific property, contact your Broker or call Vero on 0800 800 134. It would also be worth thinking about how much of your temporary accommodation benefit you have remaining.

The categorisation of your property does not change your entitlements for an existing claim under your policy. Contact your broker or call Vero on 0800 800 134 to discuss the options available for settling your claim for your specific property.

Yes, unless we hear otherwise from you, we will continue to process your cash settlement in the usual way.
Properties that have been classified as 2P may require you to do work to mitigate risk, such as lifting the property onto higher piles. Your cash settlement will only cover the work that is required to repair the property to the policy standard, and no additional insurance money will be provided for this additional work.

For more information about cash settlements and the implications of these, see our FAQs on cash settlements.

The results of your assessment will not affect the amount we offer, so you do not need to delay settling your insurance claim. However, if you would like more information before making your decision, we may be able to assist you (in addition to information from your Council).

You should get in touch with us to talk through your concerns. For more information about cash settlements and the implications of these, see our FAQs on cash settlements.

We would need to understand more about what the council has recommended for your property before we could consider repairing it. It would also be worth considering your remaining temporary accommodation allowance and how long that will last. Get in touch with us to discuss the options available for your specific property.

If the final council assessment requires you to do work to protect your property against the risk of flooding in the future, we will cash settle your claim. Work to protect against future risks is not covered by your policy, so we would not be able to complete your repair.

Contact your project manager to discuss the process for ending the contract and requesting a cash settlement instead.

FAQs:

Some additional FAQs if you have been given a confirmed Category 3 rating in the Hawkes Bay

If your home is confirmed as category 3, your local Council will get in touch with you to confirm the categorization and outline the steps of the voluntary buy-out process.

You are likely to need an Insurance Settlement Sheet from your insurer, and we are happy to provide you with this and any other information you may need about your insurance claim.

Please contact your council if you need further clarification about the next steps.

The Insurance Settlement Sheet is a summary of the money that we paid you for the damage to your home and to your land, including payments we have made on behalf of EQC. It only includes payments you (or your bank as mortgagee) have received from us that are relevant to the buyout process – see “How are the amounts in the Insurance Settlement Sheet calculated?” below. The Council will need the Insurance Settlement Sheet to understand how much insurance money you received.

Your claims handler can prepare the Insurance Settlement Sheet for you. We will send this to you or your broker via email so that you can easily pass it on to the Council.

The Insurance Settlement Sheet is a standard form agreed with the Council and ICNZ (on behalf of Vero and other Insurers) and sets out the relevant payments made to you for the settlement of your Vero home claim along with any entitlements paid to you under EQCover.

We can send you the Insurance Settlement Sheet, and at the same time, we will send you an email explaining exactly what we have included and what we have not. We will provide a Schedule of Payments setting out all the amounts paid in relation to your claim so that you can see how we have calculated the amounts included in the Insurance Settlement Sheet.

Your contents payment is for replacing your furniture and other items you need for everyday living. The Council is not taking possession of your contents, so they don’t need to deduct the contents payment from the Buyout.

Your temporary accommodation benefit was used to pay for you to have somewhere to stay while your claim was being finalised. It is not part of the repair/replacement cost for your property.

Some of the Buyout options involve the Council buying your land so the Council has asked insurers to provide details of any payment made on behalf of the EQC for land damage.

You should talk to the Council about this.

Depending on which option you choose, the buy-out offer you receive will take into account the insurance proceeds you have received. To make this easier for you, we will give you a simple document that clearly sets out the amounts you received from us and from EQC.

We don’t have any other involvement in the process but are happy to help with any other documents related to your insurance claim that the council asks you to provide.

Disclaimer – The information on this page is of a general nature only, intended to provide guidance about how your claim may be managed. The steps which will be taken to manage your particular claim will depend upon your individual circumstances and your policy wording. Please refer to your policy wording for full details of your insurance cover. If in doubt about what you should do, speak to your Broker or contact Vero on 0800 800 134. 