Insurance Council supports thrust of EQC reforms
The Insurance Council of New Zealand supports the thrust of the reforms to the EQC Act announced by the Government
today, but seeks a clear expectation that insurers should be responsible for assessing and managing claims for house
damage.
“The high-level decisions announced today are good step toward creating a better scheme for New Zealanders” the Chief
Executive of ICNZ Tim Grafton said today.
“There is acknowledgement of the increase to the EQC building cover to $150,000 ex GST.
“Most importantly though, the Government has listened to our concerns that some form of land compensation needs to be
kept in addition to the building cover. This means that where land damage has occurred separate funding to the building
cover is available to fix the land or access to the property, so the house can be repaired or rebuilt. Without these two
separate sources of funding, there was a real risk in a city like Wellington, where there are many hillside properties
that are likely to suffer land damage in a major earthquake, that people would not be able insure themselves
adequately,” he said.
“The removal of contents insurance makes sense as the focus of the scheme should be on ensuring people can be rehoused
after an earthquake, so private insurers will meet all contents claims and having a standard excess helps simplify the
claims process,” he said.
“The area where we have some difficulty is that we believe insurers should be responsible for assessing and settling all
house claims as we have largely been doing for the Kaikoura earthquake. The worst outcome would be if the law requires
all claims to be lodged with insurers, and then that information passed to EQC to assess the damage and manage the
settlements for our customers. Insurers are wanting to make this simpler and more efficient for their customers, not
more complicated” he said.
“So, we would seek clear direction from the Government to EQC that insurers should be responsible for assessing and
managing claims broadly based on the Kaikoura model. This will ensure we avoid the situation that occurred in Canterbury
where insurers are advised by EQC some years later that the building cap has been breached, and that they should now
manage the claim” he said.
“Another issue we are keen to push is that the standard of repair that homeowners receive is the same as that in their
insurance policies irrespective of whether the damage is above or below the EQC cap,”
“We will have more technical discussions with officials on this and other issues, but we are pleased with the direction
of travel and look forward to having legislation introduced before too long by the next Government,” he said.
ENDS