Anger as commercial settlements faster
Commercial earthquake claims are being settled faster than residential claims, leaving many Christchurch homeowners angry and frustrated.
Yesterday a survey of 1000 Christchurch residents revealed the two large Australian insurers, IAG and Vero, were regarded as the worst for their slowness in tackling residential repair and rebuild claims.
Information supplied to The Press by IAG and Vero show IAG has settled almost 50 per cent of its 13,000 commercial claims and Vero has settled a third, but only material-damage claims.
IAG Canterbury Recovery executive manager Dean MacGregor said commercial claims were quicker to settle because they did not involve land issues, and did not involve the Earthquake Commission, which had to examine every residential claim, agree with insurers on the scope of damage and cost of repair, apportion damage to the different earthquakes and then assign the over-$100,000-cap claims to insurers.
The severity of damage meant many commercial-damage claims were total losses and a good deal were paid in cash, MacGregor said.
In the survey by volunteer organisation Insurance Watch released yesterday, IAG was rated the worst with Vero not far behind. Lumley was rated best.
IAG brands (State, NZI and Lantern) rated two out of 10 for their rate of progress, compared to five for Lumley.
Lumley has far fewer customers in Christchurch than the two large players and earned a high rating from 22.3 per cent customers surveyed.
About half the respondents were on properties with land values of less than $250,000 and about 40 per cent, with improvements under $250,000.
Between them IAG, Vero and Crown-owned Southern Response (formerly AMI), the three largest insurers, have about 21,000 over-$100,000 plus GST residential repairs and rebuilds.
IAG has built 30 houses and completed 21 over-$100,000 repairs so far, a drop in the bucket of its 6500 repairs and rebuilds.
Southern Response has the highest number of residential claims, 9730, in line with it being the local insurer with the most customers - about one in three homes. It was the only insurer to supply information on cash settlements of residential claims.
Southern Response has completed only 12 rebuilds and two repairs, and has settled 464 claims with cash; another 1184 claims were settled by the claimant buying another house.
InsuranceWatch spokesman David Stringer said resignation to the recovery being slow had turned to resentment.
IAG and Vero customers were being told it would take five years to get to their repairs.
Just under half the sites of State customers surveyed had been assessed, compared with 90 per cent of the Lumley respondents' properties.
The survey respondents were happier with Southern Response than IAG because twice as many Southern Response customers had had written confirmation of the status of repair or rebuild.
IAG (STATE, NZI, LANTERN)
6500 residential repairs and rebuilds (over $100,000) to complete. Done 21 repairs. 30 rebuilds. 1756 repairs of paths, drives completed of 16,150 of these claims. 13,070 commercial claims with 47% settled. Overall $1.5b of claims settled. That includes $900m commercial claims.
SOUTHERN RESPONSE (formerly AMI Insurance)
9730 repairs and rebuilds from 6619 properties. Done – 2 repairs. 12 rebuilds. 464 cash settlements. 1184 buy another home. 156 customer-managed rebuilds. 1006 repairs of paths, drives, pools, of 18,259 of these claims. Claims cost $2.79b in total but $1.93b after EQC contributions $338m of claims settled.
Approx 5000 residential repair and rebuilds. Total of 19,000 residential and commercial claims. Completed 31 per cent of total claims. 24 per cent residential claims settled. 33 per cent of commercial claims settled, material damage only. Total claims settled $1.4b.