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Speaker 1: One of the themes of the show since we return

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Speaker 1: for the year is this business of the plan for

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Speaker 1: the future in certain parts of the country of the

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Speaker 1: weather keeps doing what the weather does. So the government's

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Speaker 1: answer seen this week couple of million and a contingency

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Speaker 1: fund for patch ups. I suspect the Prime Minister rafter

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Speaker 1: yesterday's chop a ride into the East Cape might have

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Speaker 1: given him a bit of a wake up call. But

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Speaker 1: in the meantime on the West Coast, AA Insurance has

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Speaker 1: hit the wall. There is no more new cover. Andy

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Speaker 1: Horner's litigation insurance partner at Minter Ellison Rudd Watts And

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Speaker 1: as with us, morning Andy, Oh, good morning mate. Am

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Speaker 1: I an alarmist. We either start planning larger scale or

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Speaker 1: there are going to be more letters from more companies

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Speaker 1: like AA Insurance.

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Speaker 2: Yes, I think that must be right. What's unusual about

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Speaker 2: what AA Insurance has done is they're so open about it.

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Speaker 2: The reality is that insurers are increasingly bringing in risk

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Speaker 2: based decisions to decisions about whether or not they're going

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Speaker 2: to ensure in certain areas and particularly high risk areas.

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Speaker 1: Yeah, these companies that talk about certain areas and areas

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Speaker 1: within areas are they able to do that realistic or

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Speaker 1: are we going to start getting more blanket areas that

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Speaker 1: go you're north of there, you're out.

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Speaker 2: What they're doing is increasingly sophisticated, and in fact, we

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Speaker 2: saw this earlier last year in the Californian wildfires, where

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Speaker 2: some insurers had strategically stopped offering insurance and sometimes had

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Speaker 2: even canceled existing insurance policies in the parts of Los

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Speaker 2: Angeles they regarded as the most high risk, and particularly

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Speaker 2: the Palisades area, and they managed to identify with tremendous

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Speaker 2: accuracy the areas that were likely to burn, and often

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Speaker 2: the areas where they withdrew insurance were the ones where

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Speaker 2: people lost their home, sometimes only a few months after

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Speaker 2: the insurance was withdrawn.

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Speaker 1: I just wonder if we're at the interface in this

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Speaker 1: country where we've got a genuine problem and a lot

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Speaker 1: of people don't appear cognizant of it. In other words,

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Speaker 1: is going to be one day in your letterbox you're

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Speaker 1: going to go, hell, what happened there? Is that fair

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Speaker 1: or not?

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Speaker 2: Yes? I think that is fair, and we're seeing the

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Speaker 2: first indications of that. So AA insurance have been very

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Speaker 2: careful here. They've reassured existing customers that they'll continue to

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Speaker 2: renew their policies and that they haven't destroyed the value

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Speaker 2: of their homes because they'll say, if you want to

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Speaker 2: sell your house and your buyer can't get insurance, then

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Speaker 2: will insure them as well. So they're looking after their customers.

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Speaker 2: But there will come a point at which that good

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Speaker 2: will runs out, or that lenders will start to say, well,

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Speaker 2: if there's only one insurer in town who will ensure

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Speaker 2: this property, that's not good enough for it.

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Speaker 1: For hours, good on, Andy, appreciate the inside. Andy Horne,

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Speaker 1: who's the litigation insurance partner at Minte Ellison Rudd, Watts

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Speaker 1: with us this morning. For more from the Mic Asking Breakfast,

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Speaker 1: listen live to news talks. It'd be from six am weekdays,

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