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 an 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 future.
“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.
The joint agreed statement between EQC and claimants re: interpretation of EQC act "as new" can be found here
Additional information on EQfix:
EQCfix.NZ is an independent public justice project whose overarching goal, in a post disaster environment, is to:
Ensure that EQC meets its obligations under the Earthquake Commission Act 1993 (the Act).
The project intends to achieve its goal by working with central and local body representatives such as legal, insurance, land, engineering, surveying, and quantity surveying professionals; as well as building-industry practitioners and tradespeople, all of whom are demonstrably motivated to ensure that the interests of the homeowner are protected.
EQCfix 's aims are:
- to provide information, and if appropriate education programmes, for homeowners that better enables them to navigate, understand, and manage the EQC process(es) from claim to reinstatement,
- to co-ordinate and support groups of homeowners to work collectively to address EQC's failures to meet its statutory obligations, when a potential EQC performance issue is identified by interested groups / individuals,
- to investigate and, if possible, to provide homeowners with access to a group solution which is affordable and realistic to advocate for an independent inquiry into EQC’s performance, handling and management of Canterbury earthquake claim and reinstatement processes,
- to review and monitor EQC procedures and processes to better ensure that EQC learns from past experience and changes accordingly.