Insurance Council of New Zealand (ICNZ) CEO Tim Grafton has denied allegations that insurers are deliberately delaying settlement of Canterbury earthquake claims.

Campaigner Cam Preston told a meeting in Christchurch that insurers are pressuring claimants to accept “low-ball” cash settlements by putting off repairs and rebuilds.

He referred to figures showing 78% of the 13,566 over-cap claims already settled have featured cash payments.

Over-cap claims are those above the Earthquake Commission (EQC) $NZ100,000 ($96,604) limit, and are handled by private insurers.

Mr Grafton told insuranceNEWS.com.au Mr Preston’s “conspiracy theory” is wrong.

“He says that because a large proportion of claims have been cash-settled that equates to some kind of coercion,” he said. “That is simply not true.”

Mr Grafton says a large proportion of cash settlements relate to properties in the red zone, where repairs are considered impractical.

Other claimants simply prefer to buy another house or use a builder they know, he says.

Mr Preston told insuranceNEWS.com.au even red zone claimants have the option of buying another parcel of land and getting their insurer to rebuild on it.

“The game [insurers] play is that they offer to repair your house but suggest a substandard method. If you don’t like that, they offer you cash, but a low amount. And if you don’t take the offer, you are sent to the back of the queue.

“Those that have spent more than four years in purgatory are likely to just throw the towel in.

“It is all done by delay. That has been the insurers’ biggest advantage over claimants. It really shows a lack of good faith to insureds in their time of need.”

Mr Grafton says the opposite is true.

“Delaying only adds to costs and creates reputational damage,” he said. “With an event of this scale there will always be a small proportion of people who are unsettled or in dispute with the EQC or their insurer.”

ICNZ says 57% (13,566) of residential claims above the EQC cap have been fully settled and a further 36% (8594) have been agreed between customers and insurers.

It remains confident most over-cap claims will be settled by the end of next year.

Christchurch resident Mr Preston, who was in dispute with his insurer Southern Response, has now agreed a settlement but says he will continue to campaign on behalf of others.