'Brutal reality check' for AMI customers

AMI admits 'difficulties and hiccups'

GEORGINA STYLIANOU AND SAM SACHDEVA
Last updated 08:03 13/02/2013
Peter Wilkins
Iain McGregor

REALITY CHECK: Peter Wilkins says the hardline approach was a "brutal reality check".

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Up to $400 million of taxpayer funds will be needed to settle AMI's Canterbury earthquake claims.

Government-owned Southern Response, the company responsible for managing the claims of AMI policy-holders, said yesterday that there had been "difficulties and hiccups", but one-third of its 6700 over-cap house claims had been settled.

However, customer support manager John McSweeney said the company had determined that up to $400m of taxpayer funds would be needed to settle claims.

In November last year, the taxpayer liability was estimated to be up to $254m, compared with a figure of $120m last March.

Multiple earthquakes and Christchurch's "unique land problems" had created unforeseen problems, and one-third of all claims had required joint reviews with the Earthquake commission because of differing positions on properties.

Southern Response chief executive Peter Rose said staff had come up with options to help quicker settlement, such as case-by-case cash settlements of the replacement value in certain situations.

In other situations, house and land packages could be offered to people wanting to move into an area where the land was more expensive than their current site.

Some of the money from the insurance payout designated for a rebuild could go towards buying new land, Rose said.

He said Southern Response's job was to "negotiate, not compromise", but the company understood the client's right to dispute a decision.

AMI customer Peter Wilkins, who attended the meeting, said Southern Response's hardline approach left some people in the audience on the verge of tears.

"My wife was shocked by it all. It was a rather brutal reality check,'' he said.

''I left the meeting with the feeling that we will either co-operate or we will go to the end of the line."

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- The Press

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