Natural Hazards, Insurance, and LIM Reports…

With the recent increase in severe weather events local councils are proactively taking steps to discover the risks of natural hazards within their regions and to identify the properties affected.

Following these investigations the results may affect the information recorded on your Land Information Memorandum, although Councils are not required to inform you of any change.

Hazards Portals

Given the subjectivity of what may or may not be noted on a LIM report at any given time, it is good practice to compare the information on your LIM report with the information noted against your property on your council’s ‘Hazards Portal’.

These portals usually contain satellite images and maps of the different kinds of natural hazards present in your area.

Hazards noted on the portal may not necessarily be reflected on your LIM report, hence it is important to compare these resources when relying on them.

Impacts on Insurance

Insurance companies consider online hazard portals when ascertaining the likelihood of natural hazards risks to a property they may be insuring.

Insurance companies do not access LIM reports and rely on the customer to inform them of any material updates or changes which may affect their insurability at the time of policy renewal.

An increased level of natural hazard risk is usually reflected by insurance companies charging increased premiums and excess amounts for the relevant hazards. Sometimes the insurer may elect to decline cover altogether.

Transparency with Natural Hazards risks

Following the Local Government Official Information and Meetings Amendment Act 2023 there has been a push for councils to improve accessibility to information by using plain language when publishing natural hazard information in LIM reports and online portals.

Summary

These issues most commonly arise at the point of sale or purchase, and it is always advisable to obtain a LIM report to ensure your best interests are protected.

The best practice advice is to always do your due diligence and enlist the help of an experienced property lawyer and insurance professional when navigating natural hazard risks.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.