Rebuild targets a 'complete failure'
Canterbury insurers are failing to meet their own post-earthquake rebuild targets, blaming "unforeseen" problems for the delays.
Southern Response and IAG, which account for nearly 75 per cent of the residential insurance market, have to rebuild more than 6000 quake-damaged homes between them in the next four years.
However, both have fallen well short of early progress predictions because of "unforeseen" delays such as geotechnical reports, Earthquake Commission (EQC) settlements, pricing, consents and customer input into design.
The excuses will be unwelcome news for thousands of quake-hit residents waiting for new houses and those mired in pre-build insurance wrangles.
Southern Response, AMI's claims management firm, needs to complete an average of about two rebuilds a day to clear its 3500 jobs before its planned shutdown in mid-2016.
Chief executive Peter Rose told The Press: "That hasn't happened, that's for sure".
"We're disappointed we haven't got the figures we'd like to get."
IAG expected to complete 500 new homes by July this year, but that figure was likely to be around 275. All IAG's rebuilds were expected to be completed by the end of 2015.
Both companies said final completion timeframes had not changed and building rates would be ramped up to meet deadlines.
Rose said the barriers were "quite complex and intricate", and affected all insurers.
"Every direction we've looked, it's contributed to delays."
There was a risk of work bottlenecking, he said, "if we don't get cracking really soon".
"We're strongly of the view that by September we will have caught up. That is our expectation.
Most customers had been "pretty patient", he said.
IAG spokeswoman Renee Walker said the complexities
needed to be worked out before rebuilds could get into "full swing", but the number of claims in progress should give customers confidence. "We understand more about TC3 land, and as we put more and more into the consenting process, we know more about the council, which foundation solutions are going to suit different types of land."
David Stringer, spokesman for non-profit advocacy group Insurance Watch, said insurers' rebuild targets had been a "complete and utter failure".
"They simply have not delivered on those . . . Nowhere near it."
There was a disparity between insurers' efficiency. "We were commenting on this, this time last year and nothing has changed."
Earthquake Recovery Minister Gerry Brownlee said EQC and private insurers wanted to move more quickly and the "extraordinary effort" put into clearing claims was under-appreciated. He was concerned insurance industry workers had become "fatigued" by the negativity.
"There are hundreds of people who live here in Canterbury and have damaged homes themselves in many cases, and putting themselves at the back of the queue, but working long days trying to sort through all of the issues," he said.
THIRD WINTER OF DISCONTENT
Tracey McKeefry just wants answers.
She wants to know why she still has to stuff newspapers into cracks in the walls of her quake-damaged house and use buckets to catch water dripping from the ceiling.
The North Beach homeowner is facing a third winter with a leaking roof protected by tarpaulins and is no closer to knowing whether the house is repairable.
She believes a resolution could be at least two years away.
"We've been told [by the insurance company] we are in the last quarter of this year. We thought that was for rebuilding but that's just for going through the negotiation stage."
There were errors throughout the 14-page scope of works of the house's damage that would have to be renegotiated, McKeefry said.
The lack of answers had caused the most frustration. She is on to her third claims manager.
"Everyone has been wonderful but every time you get a new one, you're basically starting over again.
"We just didn't see ourselves being in the position of spending a third winter having to stuff newspapers into cracks and have buckets under drips".
Running a heat pump "24-7" still failed to keep the house warm.
"There must be a solution to make us weather-tight. No-one should be expected to live in these circumstances three years on."
Those living in unhealthy conditions had been told to contact insurers, but McKeefry said emergency repair costs were deducted from temporary accommodation funds.
"We need every single cent of our accommodation supplement for when we have to move out of our property, otherwise we're going to be the ones short of [money]."
McKeefry recently returned to work after taking two years off to deal with EQC and the insurance company.
She urged insurers and politicians to "stop blaming and get on and fix it".
"When you're trying to fit that into your daily life - constantly on to people - it becomes quite a drain. Third year in, you're almost tearing your hair out."
HOUSE CAN BE FIXED, NOT LIFTED
Karen Atkinson is fully insured, but may have to stump up tens of thousands of dollars to repair her quake-damaged house.
The South New Brighton resident has called a halt to earthquake repairs on her property because her insurance company isn't paying for her repaired house to meet new flood-risk rules.
New rules in Christchurch's flood-plain areas and building requirements on at-risk properties have left Atkinson and other homeowners with an insurance headache.
In her case, because the $278,000 repair job does not require a resource consent, her insurer is not obliged to meet the new flood requirements and raise the floor levels.
She was less than impressed with their position: "I told them to get stuffed."
The property, already prone to flooding at high tide, dropped up to a metre in the quakes and the nearby Avon River has risen about 300 millimetres.
Such low-lying land is a future insurance risk.
"That means EQC can cancel [its cover], [my] insurance can be cancelled, and the bank can call in the mortgage because we don't have insurance," Atkinson said.
If she wants her house to meet the new flood-risk rules, she will have to pay the difference above the $278,000 repair bill to raise it.
She hoped the house would be declared a rebuild.
"We can't afford that kind of money, so we're sort of at a stalemate until we hear about the rebuild.
"That's not what our insurance is currently based on . . . Why the hell should I remortgage myself just to get out of a flood zone when it's not my fault?"
A building company was ready to start repairs, but Atkinson put them on hold.
A city council hazard notice would be attached on the land title and affect its value, she said.
Atkinson believed she had coped well with the stress, despite having developed a stomach ulcer.
COUPLE STYMIED BY COVER WRANGLE
Repair or rebuild?
After a more than two years, Andrea Laws and Niven Shuker still don't know what will happen to their Phillipstown home.
They think it's a rebuild, their insurance company almost agrees, and the Earthquake Commission (EQC) thinks it is easily repairable.
The couple have disputed the costings provided by EQC after an engineer's report they said was inaccurate.
The commission's report found much of the damage was pre-existing, and the couple had to get their own engineer's report saying it was caused by the quakes.
Meantime, an assessment commissioned by their insurer before the February 2011 quake found the house was within 3 per cent of needing to be rebuilt, Laws said.
The dispute, which began in January last year, is expected to be thrashed out in mediation.
"We don't know what's happening, but we're on hold. It's all just going pear-shaped," she said.
The house's foundations were "way out of level" - cracked and sinking in one corner.
The insurance company backed its own report, leaving Laws and Shuker stuck in the middle.
"At the start, the insurance company was saying, ‘It's over cap, flip a coin as to whether it's feasible to fix'. We were upset because my partner had just spent 10 years doing her up," Laws said.
"The house was up to the point of finishing touches and polishing floors."
Her insurer indicated repairs could begin immediately after the dispute was resolved.
"They seem to be wanting to get us out of their hair pretty quickly because we've been complaining to their bosses up in Auckland."
Laws' frustration was such that she wanted to lay a complaint against her EQC complaints adviser.
She felt she was being "stonewalled" and had the phone hung up on her.
"Best-case scenario is the EQC just wash their hands of it and say it's over cap. The longer they leave it, the more damage is being done because the roof leaks.
"The poor old girl is falling apart around our ears."