At Least 3000 Post-quake Insurance Claims are in Limbo

November 18, 2014

After attending an Earthquake Commission (EQC) public briefing John McCrone, reporter for The Press, penned an article “Thousands stuck in post-quake insurance hell.” This news item felt particularly poignant to us at Prendos as our Christchurch team are working with homeowners and insurance companies to help those who still don’t understand the full extent or have a solution for their earthquake damaged buildings.

Leanne Curtis, relationship manager for the Canterbury Communities’ Earthquake Recovery Network (Cancern), says those insurance claims still stuck after all this time – either awaiting a clear offer or disputing what has been offered – are the ones in serious hell.  Curtis thinks there are definitely 3000 home-owners in this position and there could be as many as 6000.

Southern Response (SR) chief executive Peter Rose highlighted SR’s overall progress, stating the significant number is that 90 per cent of all claims have been resolved. He says, those stuck are the 10 per cent or so – that is about 800 of SR’s 7200 claims – who have either not agreed a decision or else not even yet been made an offer. Rose says if you extrapolate SR’s figures to include the other insurers and EQC, you do get up to Curtis’s number of 3000 home-owners at least.

Rose then broke down the reasons why certain groups of people are getting stalled, and puts them into the following categories:

  • Retaining walls – hundreds of home repairs are awaiting retaining wall reinforcement, however repairs are being stalled as ownership and insurance cover are questioned.
  • Multi-units and cross-leases – multiple insurance arrangements and difficulties in agreeing a universal solution are holding up repairs to these types of properties.
  • Leaky homes – instances are arising where insurance covers only the cost of fixing new cladding cracks but not the home’s underlying architectural faults.
  • Flood vulnerability – Christchurch is now criss-crossed with different hazard markings on the city’s planning maps which are complicating rebuild decisions.
  • Human reasons for being stuck – those who are labelled more vulnerable e.g. the elderly, those with health issues, of those affected by stress, are struggling to make decisions and require special support.
  • Relationship breakdown – many claimants have become so upset by the insurance process they can no longer engage with insurers.
  • Legal dispute – a further large class of stuck cases are those trapped in legal dispute, many who do not realise how long legal action is likely to take.

Insurance Council of New Zealand (ICNZ) chief executive Tim Grafton says $8b in commercial building claims and $5b in residential housing claims have now been settled. So in his opinion a great many people are quietly relieved if nothing else.

Richard Maiden a Director at Prendos says “a great deal of the disputes that arise and have arisen over the Christchurch earthquake recovery issues are a consequence of advice which is ill-informed giving unrealistic expectations.” To combat this our quantity surveyors, building surveyors and structural engineers are working with property owners, insurance companies and insurance agents to provide independent insurance evaluations and professional advice on wide-ranging insurance settlement proposals.

Visit our page on Earthquake Damaged Buildings to find out more information on how we may be able to help, or fill in the form below and we will get in touch:

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