Eugenie Sage

Three years too long for insurance

by Eugenie Sage

Today is the third anniversary of the first big Canterbury quake, the Greendale quake. The thousands of earthquakes in Christchurch and the recent severe shaking in Marlborough and Wellington have underlined that New Zealanders really do live on the shaky isles.

Three years on though, thousands of Cantabrians still haven’t reached a settlement with their insurance company. It’s really hard for families to move forward with their lives and make plans for the future while they are still waiting for their insurance to be finalised.

A settlement deadline on insurance companies would help promote a faster recovery from future significant earthquakes and other natural disasters and reduce the uncertainty and stress for those whose homes and business premises and equipment are severely damaged.

New Zealand is fortunate in having the Earthquake Commission (EQC) to provide initial cover for earthquake damage.  Public and media focus has been on the speed with which EQC has dealt with claims because EQC is the first port of call. Yesterday EQC said it has settled building claims on 108,000 homes, with another 70,000 to repair or make a cash settlement.

The private insurance industry needs to lift its game given that today Radio New Zealand reported that new Insurance Council figures show that 5000 severely damaged properties in Canterbury are waiting to settle their insurance claims and that 600 of those have not even received an offer from their insurers. Until they are settled, policy holders, home and business owners are in limbo, unable to get on with their lives.

In Australia in 2011, after huge flood events the Government announced an independent review into disaster insurance in Australia. One of the recommendations was that the Insurance Council of Australia amend its Code of Practice to put in place a four month time limit on insurance claims.

Without a rule like this, there is no incentive for insurance companies to settle and make a prompt pay-out. Similar rules are overdue in New Zealand and those businesses and families still waiting three years later will attest to that.

Published in Economy, Work, & Welfare by Eugenie Sage on Wed, September 4th, 2013   

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