Insurers Settle $15 billion Canterbury Claims
The Insurance Council of New Zealand announced today that private insurers have paid out almost $15 billion to settle
commercial and residential claims since the Canterbury earthquakes in 2010 and 2011, of which over $6 billion was for
domestic claims.
Private insurers have settled almost 15,000 over cap residential Canterbury earthquake claims, including 1,100 in the
quarter to 31 March 2015, or equivalent to 12 properties a day .
At the end of March 2015, there were 24,200 over cap residential claims with 275 transferred from the Earthquake
Commission (EQC) in the first three months of the year, taking the total transferred from EQC since January 2014 to
2,238.
“Insurers are working constructively with EQC to better understand how many more will be coming over in 2015 because
we’re mindful that there are still customers who have yet to be transferred to their insurer or are in dispute with EQC
over the status of their claim,” says Insurance Council Chief Executive Tim Grafton.
“It’s not only frustrating for the remaining customers who are still to be given a clear pathway to resolution but also
insurers who still don’t know what their total liability is going to be,” says Grafton. “We’d urge customers who are in
dispute with EQC over whether they’re under or over cap to make sure their insurer is aware that they’re still in the
negotiation as this is something insurers may not have visibility over.”
Based on data jointly collected by ICNZ and CERA, 71% of all over cap residential claims are resolved or have been fully settled. Resolved means the repair/rebuild is under construction, in consenting or a building contract has been signed. A
further 23% of 24,200 over cap claims are in resolution, meaning cash settlement is pending or the rebuild/repair is in the pricing and design process.
In spite of the many complications, insurers completed 3,457 major repairs and rebuilds by the end of March 2015.
“In the first 3 months of 2015, a further 567 houses were repaired or rebuilt through the private insurer-managed
programmes but while the number of dwellings being completed in a quarter has increased, the process of repairing and
rebuilding in Christchurch is still taking a lot longer than many insurers would like,” says Grafton. “Some insurers
have responded by actively encouraging customers to look at cash settlement options, which allows customers to settle
their claim and to take control of their repair/rebuild programme now rather than join an insurer-managed rebuild or
repair queue.”
To date 11,200 over cap claims have been cash settled which has allowed customers to buy an existing home and manage
their own major repair or rebuild. About 6,000 of those claims were red zone.
The number of customers who are still to receive offers from their private insurer is down to 570 and there are 430
customers who have yet to make decisions on the offers they’ve received, some of these are ‘undecided’ customers.
“We’d encourage any customers who are unsure about the offer they’ve received or have yet to make decision to contact
the two free and independent claim advisory services operating in Christchurch, the Residential Advisory Service (RAS)
or Canterbury Insurance Advisory Service (CIAS). Both services are completely cost-free, totally independent and can
help provide customers advice and assistance that may help progress their claim,” says Grafton.
For claims out of the scope of EQC, 89% of the 64,576 have been fully settled.
ENDS