Homeowners need more help settling quake claims, mayor says
The thousands of Christchurch homeowners who have yet to settle their earthquake claims need more help, Mayor Lianne Dalziel says.
"If you haven't got your insurance settled how can you move on? I think this is something that is really holding back so many people. It might be a small percentage but it is thousands of people," Dalziel said.
"It is still so hard for so many people. There are people who are literally stuck."
This week it was revealed that private insurers have paid out $16.7 billion in Christchurch for commercial and domestic earthquake claims, but more than 4600 homeowners were still awaiting settlement for major property damage.
The Insurance Council (ICNZ) said nearly 5400 major repairs and rebuilds were completed in 2015, a 21 per cent rise in the settlement rate compared with the previous year.
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According to data jointly collected by ICNZ and the Ministry of Business, Innovation and Employment, 18,958 residential claims classed as over cap – costing more than $100,000 – had been settled. That figure represented three quarters of all over cap claims.
A further 7 per cent had been resolved and repairs or rebuilds were under way.
However, 4624 claims remained unresolved. The majority of those were claims where the design or cash settlement offer was still under negotiation, or an offer had been made but not accepted.
A further 448 claims were still going through a process to verify that they were over cap, and no offer had been made for 442 claims.
ICNZ chief executive Tim Grafton said the latter tended to be claims transferred from the Earthquake Commission (EQC) after it determined they were over cap. There were 1425 such cases transferred from EQC last year.
Private insurers were on track to settle the vast majority of Canterbury earthquake claims by the end of the year, but the insurance industry did not know how many more over cap homes might come through from EQC, he said.
Grafton said the delay in getting over cap earthquake claims settled was difficult for customers.
"It means you as an insurer have not been able to deal with your customer for four to five years when their property has major damage that needs a major repair or rebuild."
The lack of certainty over the final cost of the earthquakes also risked damaging New Zealand's reputation with the global insurance industry.
"When the insurer gets a surprise, the reinsurer gets a surprise, and it revises the total cost of the Canterbury event upwards," Grafton said.
"It begs the question, why do we not know the final cost now four or five years later? There's an issue there about New Zealand Inc and how well we can project final costs for the reinsurance community offshore.
"That's why, looking forward, our view is that the lodgement and assessment of claims should go to the insurer in the first instance. That would mean the insurer would be aware of the major repairs and rebuilds much earlier in the process and be able to move on those."
Dalziel said the number of people with unresolved insurance claims worried her.
"That is what keeps me awake at night, knowing that there are people who cannot move on. There is so much potential here in this city and there is so much happening and so many people who have moved on or who have done very well, but it is this group I think we should focus on this year and get them across the line."
An extra mechanism was needed to help people resolve their outstanding issues.
"Can we have a deadline whereby if you haven't got things settled you can get in front of somebody who is neutral, who is qualified and who is able to give a steer, even if it is not binding arbitration, just someone who says 'come on'? There are so many people who have said to me all they want is for someone to tell them if the offer is fair," Dalziel said.
"At this point in the process we have to get people across the line. I do believe five years on it is time to get things settled once and for all."