AA Insurance has stopped selling home cover to new customers in New Zealand postcodes it has assessed as facing high risk of earthquakes.

The restrictions were introduced in April. Head of underwriting Dee Naidu says AA intends to reopen cover to new customers if its exposure reduces.

“AA Insurance has a temporary restriction on issuing new home insurance policies in a small number of postcodes where there is very high seismic risk,” she told insuranceNEWS.com.au.

“Limiting new policies in high-risk areas is never something we do lightly, and it reflects our ongoing risk assessment and responsible approach to managing exposure in high-risk areas.

“We continue to take on our fair market share of high, medium and low risk in these areas.”

AA Insurance – which paid $NZ532 million ($478 million) in claims in the year to June – assesses the likelihood and potential impact of natural disasters at specific addresses using risk modelling, third-party data and its claims history.

Current AA customers are unaffected by the postcode restrictions and can renew policies as usual if they meet underwriting criteria.

"Insurers won’t touch it with a 10-foot pole": in the latest Insurance News magazine, a flood-hit town is again counting the cost of underinsurance