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20 June 2013
New Zealand insurers are being urged to give Christchurch homeowners shorter timeframes on rebuilds and to have more staff available in the city, as frustration grows over delays on claims settlement.
Earthquake Recovery Minister Gerry Brownlee says he has lost patience with private insurers and called on the industry to speed up claims processing, while Christchurch City Council has asked the Government to establish an insurance tribunal in the city to hear complaints from residents frustrated at lack of progress on land and rebuilding decisions.
About 20% of residential claims have been settled, and dissatisfaction and delays have led to the formation of various lobby groups that are unhappy with decisions by insurers, the Earthquake Commission (EQC) and authorities such as the Canterbury Earthquake Recovery Authority.
Insurance Council of New Zealand (ICNZ) CEO Chris Ryan says there have been a number of calls for tribunals to hear insurance issues but it is unclear what they would be able to achieve.
“From our perspective it is probably an additional level of dispute resolution over and above about six or seven mechanisms already there,” he said.
Mr Ryan told insuranceNEWS.com.au that insurers are putting on more staff in Christchurch and ICNZ is considering setting up a telephone inquiry service.
“We hear these concerns,” he said.
Although residents are frustrated at the time taken for the rebuild, he warns it may be difficult to speed up decision-making when insurers are waiting on land assessments and other data.
Different data is required for zones within Christchurch, with some being affected by liquefaction and others at risk of rock fall.
Land that has dropped lower in the earthquakes now needs assessment for flood risk, and Mr Ryan says a limited number of specialist engineers and scientists are available to do the work.
There is also uncertainty about the requirements for foundations in some cases of repair or rebuilding.
“A simple solution is not possible,” said Mr Ryan.
“The reason for delays is lack of information which means it is very difficult to give people genuine timeframes,” he told insuranceNEWS.com.au.
ICNZ is also questioning reports that homeowners have been told they will have to wait three to eight years for rebuilds – a timeframe he describes as “unlikely”.
Christchurch City Council has called on the Insurance & Savings Ombudsman, which is based in Wellington, to set up a Christchurch branch or tribunal to hear complaints.
But Ombudsman Karen Stevens told insuranceNEWS.com.au she has no jurisdiction to set up an independent tribunal.
The ombudsman service investigates after policyholders have used insurers’ internal dispute schemes, and many homeowners have not yet gone through the claims process because of issues over land and the involvement of the EQC.
“They are really nowhere near being in a position to make a complaint,” Ms Stevens said.
Her office has received over 600 enquiries and dealt with 33 complaints related to the Canterbury earthquakes.
The type of enquiry handled by her office has changed over time from being about insurance cover to now being around repair or rebuild issues.
The EQC insures the first $NZ100,000 ($76,900) of damage and then passes higher amounts onto private insurers. Ms Stevens says she is seeing disputes around the cut-off point, such as where either the EQC or a private insurer says the repair is below the cap and the other believes it will cost more.
She says an independent tribunal could look at timing and apportionment issues but there are no easy answers for an event on such a scale and with complex issues around liquefaction and how to apportion damage between the series of quakes and aftershocks.
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