8 May 2023

Keeping business alive 'may not be possible' as ram raids hike up insurance

6:43 pm on 8 May 2023
Derek Bealing said he spent thousands of dollars rebuilding and securing the frontage of his small Wellington bottle store after ram raiders crashed into it in July 2022.

Derek Bealing said his building insurance excess was going to increase from $1000 to $25,000. Photo: RNZ / Bill Hickman

Retailers are warning insurance hikes in the wake of ram raids and other crime could force many out of business.

More than 80 Retail New Zealand members have said they will risk going under-insured rather than pay drastically rising costs.

Derek Bealing said he spent thousands of dollars rebuilding and securing the frontage of his small Wellington bottle store after ram raiders crashed into it last July.

This year, youths broke into his store twice within 10 days.

"We just got the window restored and the same group of young people burgled the shop the next weekend," Bealing said.

He said his landlord will be forced to pass on a massive rise in insurance excess to him and five other businesses in the building.

"At the time [of the ram raid] the building insurance had an excess of $1000. The insurance company made it clear that on renewal the excess was going to increase to $25,000," Bealing said.

Ravinder Singh said his Pukekohe dairy was hit by two ram raids within 10 days of each other late last year.

He said he felt betrayed by his insurers who, despite receiving higher premiums and a greater excess, still have not paid out his current claim.

"I was the one who was the victim here and I've given them all the proof, all the invoices, highlighted everything. I think they don't want to settle the claim. [It] might be they have too much claims to settle and that's why they hold me up," Singh said.

Singh said each raid cost in excess of $10,000.

Retail New Zealand chief executive Greg Harford said the effect was being felt in businesses all over the country.

Retail NZ spokesman Greg Harford

Greg Harford Photo: Supplied

He said most retailers typically made less than $1 profit for every $20 spent in store and the fee hikes were really hurting.

"We've heard from businesses who insurance costs, in response to specific instances of crime, have risen from $2000 a year to $30,000 a year. Some of these costs just are not sustainable for small businesses," Harford said.

Insurance Council of New Zealand spokesperson Christian Judge said the best way for retailers to keep a lid on their premiums was by adding measures to increase their security.

"You would expect to see different levels of measures in place across those different types of businesses to make their premiums more manageable. We're talking about bollards, shutters, special glass [and] alarm systems. That's not always easy and it's not always appropriate for every type of business," Judge said.

Bealing said he was in discussion with Wellington City Council but bollards were not practical in the limited space outside his store.

He said the council had suggested bike racks or bus seating to limit access to his storefront.

If the measures go ahead it could reduce the excess charges to $10,000. Bealing was hoping it would be enough to keep his business above water.

"Could I handle it? We'll see. We employ local people, we pay very good wages, we'd love to keep going but, unfortunately, it may not be possible in the current environment."

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