Insurance advocacy service approved
Earthquake Recovery Minister Gerry Brownlee has warned the Christchurch City Council it will be on its own if its new insurance advocacy service incurs major legal costs.
Only days after Brownlee announced the impending launch of an insurance advisory service, Christchurch City councillors yesterday voted unanimously in favour of setting up an insurance advocacy service.
This means ratepayers will not cough up $150,000 towards the Government's free advisory service, which the Canterbury Earthquake Recovery Authority is poised to launch next month.
Brownlee announced the advisory service on Friday. However, it was not the advocacy service many residents had called for.
Brownlee also dropped in a surprise bill for the council, saying it would fund $150,000 while insurers would put up "the bulk of the money".
Mayor Bob Parker, who said on Friday he was "thrilled" by news of Cera's service, yesterday voted in favour of forming a trust to run an independent advocacy service.
About $200,000 from the Mayor's Earthquake Relief Fund will be allocated to the trust to get the advocacy service up and operating.
"There is a strong need for this, particularly for the more vulnerable citizens," Parker said.
Last night, a spokesman from Brownlee's office said Cera would still "forge ahead" with the advisory service, despite the council's move and without its $150,000 contribution.
The spokesman said all the work for Cera's service had "largely been done".
Brownlee declined to speak to The Press last night but in a written statement said the council's decision was made "in isolation from Cera and other parties".
Cera had investigated establishing an advocacy service, and found it threw up "significant potential legal and regulatory complexities".
Cera's advisory service was, therefore, "the most workable and therefore desirable option".
If the council's service flopped, Brownlee was clear he would not come to the rescue.
"An advocacy service delivers another legal party to that relationship [between homeowner and insurer], a factor which has potential for considerable problems, including delays, further costs to all parties and questions of liability," he said.
"The Christchurch City Council's advocacy service will stand alone, with all the liabilities that may ensue from it falling to the council."
Yesterday's vote also went against advice from council staff, who had recommended councillors hold off making any decisions until they knew more about what the Government and Cera had planned.
However, councillors decided an advocacy service was too urgent to wait.
Earlier in the council meeting Ali Jones, representing the TC3 residents group, told councillors Christchurch people were struggling with insurance and EQC, and needed an advocacy service that "had teeth", was well resourced and staffed.
"Please let's not hear why this advocacy service cannot happen; let's hear how and when it can happen."
Cr Tim Carter warned the $200,000 contribution from the council might not be enough because it was unclear at this stage how many people would avail themselves of the badly needed service.