One of the country’s leading insurers is refusing to provide insurance to some homes in a modern Napier City Council-owned residential development because of what it perceives to be a “high risk of flooding from sea surge”.
By Linda Hall of Local Democracy Reporting
Parklands Residential Estate, near Park Island, is being built in stages on a 120ha site formerly known as the Lagoon Farm.
But when a prospective buyer looking for quotes on Tower Insurance’s website entered an address from the Parklands estate, a message popped up saying:
“We’re sorry. The details you’ve given mean that we’re currently unable to offer you cover.”
The buyer tried eight random addresses in the suburb on three different streets including Waipunga St, Cape Pl and Pelorus Ave.
She said seven came back with the same message.
Parklands is run by Ahuriri Investment Management (AIM), which was set up in 2025 to run the council’s investments.
AIM CEO Gareth Kilsby said the estate had been planned and developed using the latest regional coastal inundation modelling commissioned by Napier City Council, Hawke’s Bay Regional Council and Hastings District Council in 2023.
“The development is fully consented under the Resource Management Act and Building Act frameworks with conditions in place to manage flood risk, including minimum ground and finished floor levels based on the latest available information,” Kilsby said.
But Tower CEO Paul Johnston said its modelling indicated that some properties in the Parklands area had a higher risk of flooding from sea surge.
He would not say how many properties in Parklands there were that Tower would not cover.
He said Tower assessed risk at an individual property level, using address‑specific hazard modelling and risk‑based pricing.
“We do not impose blanket pauses or embargoes across entire areas. Instead, we assess each property on its own merits.
“But in some cases, homes located close together may face the same natural hazard risks, which can result in similar outcomes through the quoting process.”
He said Tower still offered insurance to lower‑risk properties within “higher‑risk areas”.
Parklands Estate is more than 2km from the Pacific Ocean.
Kilsby said they understood insurers could apply their own assumptions and modelling and they were trying to understand the inputs being used by Tower to ensure the most up-to-date information was being considered, including increased ground levels delivered as part of the development.
“Importantly, this position is not consistent across the insurance market.
“Feedback from residents and purchasers indicates insurance remains available from other providers and section sales have proceeded without insurance concerns being raised.
“Parklands continues to attract strong buyer interest and remains a high-quality, desirable place to live.”
Johnston said when new houses were built, Tower updated its modelling, taking into account any risk mitigation through design, construction and local infrastructure.
“We continue to insure homes throughout Napier and do offer insurance to lower-risk homes in the Parklands area.
“Our models won’t always reflect property‑level risk mitigations that homeowners may have implemented, such as changes to floor levels, new drainage, or foundations, unless those details are shared with us.”
Kilsby said Parkland’s minimum ground levels and building platform heights were set to ensure homes were built above levels identified in the modelling, including significant storm surge scenarios.
He said some sections had been filled as part of development works, so land levels in many areas were higher than when the 2023 modelling was prepared.
“We are proactively engaging with Tower to understand the assumptions and modelling behind their approach.
“Our focus is on ensuring Parklands continues to be a well-planned, resilient community that people can invest in with confidence.”
So far, 720 lots have been sold.
There are nine sections on the market with 12 more to come.
Hawke’s Bay Regional Council controls the wider flood control scheme and reviews mitigation requirements on an ongoing basis.
- LDR is local body journalism co-funded by RNZ and NZ On Air.
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