C'mon EQC, explain apportionment

Last updated 06:00 11/05/2012

reid stivenLast September, the Earthquake Commission cut me a cheque for about $112,000 for the over-cap damage to my Mount Pleasant home. Then somebody intervened, cancelled the cheque and here I am eight months later, still waiting for payment.

I'm caught in the dreaded apportionment trap, where EQC divines which earthquake caused what damage and then draws on different insurance and reinsurance schemes to pay for repairs.

EQC has done a lousy job explaining how apportionment works in practice, why it's so difficult and why it's taking so long. The state-owned insurance owes its customers far better information than provided so far. Front up, EQC.

To date, the company has published largely identical (and weak) explanations of apportionment on its website, Facebook pages and in reports to Parliament.

All have included, for example, this baffling statement: "Bear in mind that apportionment will not involve allocating specific damage to an event (e.g. broken tiles in the kitchen to the 22 February event). Instead it involves allocating a proportion of the total damage value to each event."

Call me thick, but how does EQC decide what proportion of total damage can be allocated to which earthquake without knowing what specific damage was caused by each earthquake? Doesn't it need to know that the granite bench top in the kitchen cracked in February and the plywood bench in the study was slightly damaged in June in order allocate (apportion!) the cost to February or June?

Replacing the granite bench will cost thousands; fixing the ply bench requires glue and three screws and about 10 minutes. If you're in the reinsurance business, you want to fix the ply bench and stick some other sucker with the granite replacement.

But no. EQC allocates a "proportion of the total damage value to each event". But how?

"EQC uses a variety of methods to establish how damage should be apportioned,'' EQC says on its website, especially when it didn't inspect after each quake. ''This includes asking the homeowner or insurer for details of which damage occurred following each event, and looking at apportionment of damage in other similar properties in the area."

This doesn't seem overly complex, but I was told this week by an EQC staffer that each apportionment takes 3-4 hours. In mid-April, EQC announced it was seeking an ''automated process'' to ease the ''very manual'' burden.
''We're not talking years, we're not talking a year, but I don't want to give you a time frame," said EQC Canterbury events manager Reid Stiven (pictured).

Bearing in mind, the High Court ordered apportionment in September 2011, this looks damningly slow.

But who knows? It might be reasonable if EQC shared with Cantabrians more information about apportionment: How it works, why it's hard, how many staff are working the project, how many apportionment claims have been settled/outstanding, which insurance companies are helping/hindering the project? Give examples. Invent a hypothetical home to illustrate the process. The list goes on.

Press quake reporter Michael Wright this week reported well on the complexities of new foundations for TC3 properties. Give him a call.

UPDATE: The EQC has responded to this blog via its Facebook page. See their response here.

- The Press

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GC   #1   06:52 am May 11 2012

Apportionment is an evil term, I wonder how EQC are going to apportion there time in court?

denni   #2   07:02 am May 11 2012

Would be nice to know the actual cost of fixing our house. We can't get anywhere with EQC over this and the apportionment process either. All of the scopes of works have no value stated. We have no control over anything and have 4 major damage claims in.

Mike   #3   07:07 am May 11 2012

Yet another Reid Stiven clanker - surely this an has a use by date?

Mark   #4   07:25 am May 11 2012

In March 2011 my insurer, AMI, asked EQC for an additional 106,000 for the Feb Quake. EQC would not acknowledge they had been asked. In August they refused this payment without telling AMI or myself. I was told I was specifically excluded from the process. In April this year I was sent a cheque for 5,900 ish with no explanation of the sum. EQC have still not informed AMI/Southern Response.

This dysfunctional rabble of an organisation(oxymoron there) are a disgrace. Even the rapacious insurance companies have admitted they would rather pay in full than have EQC between them and settlement!

D   #5   07:43 am May 11 2012

Apportionment is EQC's excuse for not paying what's due and holding on to the overcap payments whilst getting maximum interest on the same said payments. They are not stupid, they lost the high court ruling and from that time 'apportionment' was born.

Same ol same ol   #6   07:59 am May 11 2012

You got as far as a cheque?! Well done I say! I'm stuck in the same quicksand of apportionment as you. EQC isn't asking homeowners for their assessment of damage in my experience, they are just using it as an excuse to delay payments. I went so far as to complain...and still no action (but thanks for the apology EQC - just a shame you couldn't actually do anything but say sorry). Any hotshot lawyer out there want to make their career and take a class action?

Azzajazza   #7   08:29 am May 11 2012

Thanks for this Will, it is very frustrating being in a similar situation to you. You are so right, an example or some tangible, understandable information on apportionment would make the world of difference. I appreciate things take time, but when individuals have to be so involved in the insurance/ECQ process, then it's in the best interest for EQC to provide as much info as possible so we can understand a little better.

MyWay   #8   08:43 am May 11 2012

While you are at it (explaining apportionment), how about explaining how the new foundation guidlines will be applied to the flood management zone.

Paul   #9   08:47 am May 11 2012

The problem I have with apportionment is that the figures EQC are using haven't even been derived by them. I was asked to provide a 'guesstimate' in percentage terms of the damage caused by each of the main events which I did. Some how, these figures now appear to be set in stone with EQC, AMI (our insurer) & Arrow using them as the basis for the eventual financial settlement of our claim. Problem is, if I have my figures wrong, it could adversely affect our over-cap payment. Guess what though, nobody at EQC is remotely interested in my argument!!!!

Old lady   #10   08:47 am May 11 2012

We had medical problems before the earth quake, we need our other fire place, to keep warm for the second winter in a broken,frozen house. Being treated this way, by the government, because it is a govt scheme, is the straw that broke the camels back. Our dr has written, we have begged, but no one will see any common sense. Re class action if everyone put in some cash, couldn't we all bring this into the high court, and override the persons responsible for this mess. Mr Gerry Brownlee apparently can release funds at a drop of the hat for social housing, are our needs not social enough. if my son dies, a reckoning will be visited. Did anyone see the press release about the chaos that set up the Eqc, computer system. Found guilty of importing class A drugs. They were responsible for setting up the computer system.

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