Content supplied by the Insurance Council
Insurers involved in the Canterbury earthquake recovery effort have paid out over $10 billion in commercial and residential settlements, according to the Insurance Council of New Zealand.
At the end of 2013, $6.7 billion dollar had been paid out for commercial settlements and $3.5 billion in residential settlements.
“Of the $6.7 billion of commercial claims paid out, $2 billion was in 2013 alone and that doesn’t include recent settlements such as the largest insurance pay out in New Zealand’s history to the Ports of Lyttelton of $428 million,” says Insurance Council Chief Executive Tim Grafton.
The Ports of Lyttelton pay out will occur in the first quarter of 2014.
“That means 70% of all commercial claims have now been settled and reinforces the value of insurance in helping the commercial sector to quickly recover from what was one of the biggest-ever insurance disaster events globally,” says Mr Grafton.
“The commercial pay outs also includes $1 billion in business interruption insurance, money that helped Canterbury to get back on their feet quickly following the earthquakes,” he says.
In 2013 more than $1.56 billion was paid out in settling and completing Canterbury earthquake residential claims.
“That’s over $4 million a day being paid out to settle residential claims, taking the total residential payments for repairs, rebuilds and cash settlements to date to over $3.5 billion,” says Mr Grafton.
Based on data collected by CERA to 31 December 2013, 54% of all Over Cap and Out of Scope claims with insurers and government-owned claims management company Southern Response were settled and completed, that’s includes 58% of all Out of Scope and 42% of all Over Cap claims.
Out of Scope claims are those outside the scope of EQC which includes driveways, pathways and swimming pools. Over Cap claims are those above the $100,000 plus GST cap for EQC.
The CERA data shows that insurers have 64,925 Out of Scope claims of which 37,932 have been settled and completed. Insurers have 21,962 Over Cap dwelling claims of which 9,119 have been fully settled and completed.
There is a further 9,759 Over Cap dwelling claims in the pipeline, taking the total settled and completed and in progress (after agreement with the insured) to 86% of all Over Cap residential claims.
“Last year we also started to see completed insurer-managed rebuilds and repairs that began in 2012 come through the other end of the pipeline, with 725 rebuilds and 769 repairs completed by the end of 2013,” says Mr Grafton.
“These were insurer-managed rebuilds and repairs that could only have started late in 2012 because of ongoing seismic activity, the release of building guidelines and ongoing EQC apportionment work,” he says.
Builders are reporting that over 6,000 residential properties were built in 2013 and will increase to 7,000 in 2014, much of that will be from insurance monies released through cash settlements.
“Also consenting forecasts from the Christchurch City Council indicates that 2014 and 2015 will be a big year for the completion of insurer-managed residential rebuilds and repairs,” says Mr Grafton.
3 Comments
This is whitewashing the facts.
Firstly is it 21,000 or 24,000 overcap claims as reported earlier in the month?
Next if 9000 out of 24,000 are settled that is hardly good progress after 3 years. "In progress" is meaningless as it certainly does not mean "in construction".
Of the claims settled, how many were for token amounts topping up the EQC payouts?
I can say with absolute certainty that there are still many claims which have not even had a first assessment done by the private insurers.
I have a property severely damaged in 2011 and unsafe to occupy for which I insisted NZI/IAG assess the property as it was likely overcap. NZI/IAG refused and left it in the EQC quagmire, EQC finally sent a qualified builder around in December after years of refusals, immediately it was classified overcap and almost instantaneously paid out. As of today IAG are still to get a first assessment done after 3 years! And I still have other properties in the same EQC situation and IAG still refuse to assess.
I will add that I was surprised at the speed EQC made the payout on the above mentioned claim (within 8 weeks of the December visit), I also got a personally apology from an unusually friendly EQC person. It might be that they were embarrassed how bad earlier assessments were and that maybe I wouldn't be so angry with them for causing 3 years of hell? It needs publicised how long and how badly people have been treated in ChCh, maybe I should contact Campbell Live!
Also given that most commercial policies have indemnity sums attached, it is extremely poor form that only 70% are settled.
Poor form all round, and especially poor form from the insurance council and Grafton trying to spin this as a good job.
Thorough regulation and punitive conditions put on these slack (excuse my French) arse insurance companies should be imposed. Failing to act in the utmost good faith and in a timely manner is completely unacceptable.
Key and Brownlee should be ashamed and will certainly be punished by the voters who are affected and anyone else who shares a shred of decency.
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