Govt quake advice lacks 'teeth' of rival

18:43, Apr 25 2013

A Government service to help Cantabrians with their earthquake insurance battles has been slammed as a "total letdown" and not enough for weary residents in deadlocks with their insurers.

A rival advocacy service claims advice alone will not cut it for Christchurch residents, who need a service "with teeth".

Two services to help people navigate through insurance wrangles emerged last week - one set up by the Government and insurers, to offer advice, and another by a community trust to advocate for residents and help them take legal action.

While both have the same goal, their differences are stark: one will advise people on their options; the other will fight on their behalf.

The Government has shied away from fighting for residents, with Earthquake Recovery Minister Gerry Brownlee having warned of the legal pitfalls of a public advocacy service.

"[It] has potential for considerable problems, including delays, further costs to all parties and questions of liability," he said.

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However, Lane Neave insurance lawyer Duncan Webb dismissed Brownlee's concerns as "an absolute smokescreen" and said the Government's advisory service was a "total letdown".

"The service Gerry Brownlee announced is mainly funded by the insurers and by Cera [the Canterbury Earthquake Recovery Authority]," he said.

"They don't want to fund people to second guess them or oppose their decisions."

One of the leaders of the new advocacy service, TC3 resident Ali Jones, said many Cantabrians were dealing with the same roadblocks from insurance companies and "have already got all the advice available, but are still in deadlock".

"The only thing people can do once they have received advice and find they are still hitting their heads against a brick wall, is to take legal action.

New Zealand's insurance regulations pale in comparison to other countries such as the United States, which imposes financial penalties on insurance companies to ensure claims are settled within a reasonable timeframe, Jones said.

"We have no time to lobby for legislation and regulation. We urgently need an advocacy service with teeth and legal standing that can, in effect, be our regulation."

Mayor Bob Parker backed the Cera advisory service, but agreed with Jones that some Christchurch residents "need much more than just advice".

"There is a number of people for whom the whole process has got too much," he said.

"They've been knocked back so many times they're feeling utterly powerless, they've run out of energy and they simply don't know what to do any more."

"They actually need someone to get involved to advocate on their behalf and solve the problem."

On Wednesday, the Christchurch City Council voted unanimously to grant $200,000 to the advocacy service.

The funding came from the Mayor's Earthquake Relief Fund - not ratepayers, Parker said.

Council's support of the service was "in no way a criticism of the Government", he said.

Parker believed Cantabrians who had "gone through the hardships and turmoil of the last couple of years and completely lost faith in insurance companies" would find it difficult to trust a service that was run in partnership with the insurance industry.

He hoped to see the trust established "really quickly, because the work they need to do is urgently required".

Cr Glenn Livingstone first raised the need for an insurance advocacy service almost a year ago and said it had taken too long.

"Any liabilities will not fall onto the council ... that's why a community trust will be established and it will be the trust that is held accountable and responsible."

The Press