Canterbury tales: more twists in a claims saga
Canterbury tales: more twists in a claims saga | Insurance Business New Zealand
Catastrophe & Flood
Canterbury tales: more twists in a claims saga
Are the figures being “massaged”?
Catastrophe & Flood
By
Daniel Wood
The minutes from a June meeting of the Canterbury Homeowner Advisory Group reveal that the Earthquake Commission, or EQC Toka Tū Ake (EQC), asked the New Zealand Claims Resolution Service (NZCRS) “to stop supporting on-sold homeowners not in the Treasury Programme.”
According to its website, the purpose of the NZCRS, a government agency, is “to provide homeowners with free independent support to resolve residential insurance issues resulting from natural disasters.”
The minutes of the meeting say EQC have now “retracted” this notification.
Insurance Business reached out to the Natural Hazards Commission (NHC) – the EQC’s new name following last month’s introduction of the Natural Hazards Insurance Act 2023 – for clarification.
Memorandums and misunderstandings?
Pip Andrews, the NHC’s head of on-solds, said his agency and NZCRS have a memorandum of understanding that outlines the scope of services provided by NZCRS on insurance claims.
He said, in recent years, the NZCRS has also helped applicants involved in the Crown’s on-sold programme, with NHC’s support.
“We have recently been discussing support options for homeowners who are raising other legal concerns that are not related to the NHC legislation or the Crown on-sold programme,” said Andrews. “These types of issues do not fall within the MOU but, based on our strong working relationship and a shared objective of helping homeowners get the right advice, we have been working together on pragmatic support options and agree that homeowners in these situations need independent legal advice.”
However, other sources have told IB that, 13 years later, there are still many hundreds of both ongoing and re-opened claims still awaiting resolution.
The minutes of the June meeting appear to support that view and detail a somewhat complicated differentiation between different types of Canterbury claims.
The meeting record goes on to say that “for CES claims, there are 576 open claims, with 88 aged over 12 months.” There are also 374 in the inquiry phase, “of which 75% will result in an open claim.”
For claims in the so called on-sold program, the minutes say there are 675 active claims and 5,303 closed to date.
What is a settled claim?
In a recent interview with IB, Ali Jones (pictured above) discussed ongoing Canterbury earthquake claims issues.
Jones described herself as an independent claims preparer. She’s also a public relations consultant and elected member of a community board for Christchurch City Council. She volunteers time to help locals who are still struggling to settle their earthquake claims.
Given the EQC’s assertion that all original earthquake claims are now settled, IB asked Jones if a lack of consensus over the definition of a settled claim is one of the problems?
“I think that is part of the problem here,” she said. “There doesn’t seem to be any accepted definition – in the EQC world anyway.”
Jones said it’s implicit in the word settlement that there is agreement.
“Otherwise, you make it a forced settlement,” she said.
Jones said one homeowner she was working with late last year received an email from EQC that said their claim was now closed and to reach out if there were any issues.
“As far as he was concerned they were still trying to sort out some pretty gnarly issues!” she said.
Jones said the claims figures for the earthquake were being “massaged.”
“Homeowners are receiving emails saying their claims are closed,” she said. “Then what EQC [now the NHC] does is reopen them and consider them then to be a new claim.”
Jones said another big issue is training.
“I had a meeting recently that included a really senior EQC [NHC] assessor,” she said. “I questioned the proposed reinstatement that he was putting forward as not being ‘as we knew’, which is in the Act.”
Jones said his response was that this is an insurance matter and not his area of expertise.
“That is unacceptable after 13 years,” she said. “This is not an insurance expertise area, that kind of stuff, at this stage, is inexcusable.”
Jones said NHC assessors need to understand the Act they are working under.
“I know there are good people in the NHC but I think there has to be some work done on training to get consistent understanding on the Act, reinstatement, policies, the Building Act and process,” said Jones.
$31 billion in damage costs
The Canterbury Earthquake Sequence (CES) in 2010-11 was New Zealand’s most costly natural catastrophe. The quakes resulted in 650,000 insurance claims and a total insured cost of more than $31 billion.
Are you an insurance broker involved with outstanding Canterbury earthquake claims? How do you see the challenges?
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