7 November 2017
Kaikoura – A Year On, A Sad Indictment on Insurers and EQC
EQCfix concerned things are still not being done correctly in Kaikoura
EQC (via private insurers) is continuing to apply an incorrect part of the EQC Act in its assessment process of
earthquake damage in Kaikoura.
The Insurance Council of NZ has today suggested the model being used in Kaikoura where insurers are acting as agents for
the Earthquake Commission (EQC) and are managing most of the building and contents claims, is “the model for (sic) (the)
future as it has proven to deliver efficiencies for everyone by reducing double handling and speeding up settlements”.
Christchurch accountant and advocate for insurance and EQC claimants, is sounding a word of caution, as the Government
reviews the way claims are managed with the ICNZ advocating for insurers to continue to assess and manage all claims in
“There are some positives in this proposal but insurers certainly need to get their own houses in order before they
start taking on EQC’s work. We are almost a year out from the anniversary of this event and only 65% of building claims
have been settled. People are living in garages, some haven’t even seen an assessor yet; we don’t see that as something
to be proud of,” he says.
Continuing to be of concern to claimants support group EQCfix, with whom Preston works, is that private insurers
assessing damage in the seaside town have been advised by EQC to use a part of the EQC act that wrongly defines
replacement, contrary to a joint agreement signed last April.
All claims related to the Kaikoura quake are being cash settled, and as such EQC agreed in a joint statement with a
group of claimants last April that “replacement” in cash settlement situations means “as new”.
Cam Preston says EQC documents he has received under the Official Information Act clearly show EQC, via the private
insurers, has been and continues to use section 9(1)(a) of Schedule 3 of the EQC Act which says "replacement" means “not
exactly or completely but only as circumstances permit and in a reasonably sufficient manner”.
“That is not ‘as new’ and EQC agreed last April they would only use that part of the act when it was a ‘managed repair’
as it was under the Canterbury Home Repair Programme with Fletchers,” says Cam Preston who says this can significantly
reduce the financial settlement someone receives. “The main concern of the group is that claimants are likely to be
negotiating replacement of damaged property at a level that is significantly below the standard of replacement that they
are entitled to, according to the Joint Agreement signed last April.”
EQCfix is concerned that ICNZ seems happy to the point of celebrating, that almost a year after the Kaikoura earthquake,
only 65% of house claims are settled (and what does that actually mean?), while assessors continue to use the wrong
interpretation of the EQC act.