Fighting misinformation

The Commission for Financial Capability is linking up with the Insurance Council of New Zealand to develop and run a programme for people in Māori and Pasifika communities.  The ICNZ is keen to improve engagement with at risk groups and so is putting $100,000 into funding the programme.

Tim Grafton, Insurance Council Chief Executive, said: "We chose the Commission because of their specialist knowledge on how to influence long-term behaviour change to improve levels and knowledge of financial capability in Māori and Pasifika communities."

Insurance advisory: Easter heavy rain expected for BOP

With up to 300mm expected to hit Bay of Plenty in the 72 hours from midday Wednesday, on an already saturated region, the Insurance Council of NZ is urging people in the region and throughout the country to be prepared for flooding.

“We want to help communities to reduce the risks they face.  If you can get as much of your home contents out of harm’s way, secure heavy outdoor objects and park vehicles in garages if possible” said Tim Grafton Insurance Council Chief Executive.

Pre-flood tips:

  • Move valuables from lower ground including electrical equipment if possible
  • Secure outdoor possessions
  • Have emergency equipment like portable radio, torch, mobile on hand
  • Keep your insurer’s contact numbers on hand

“Taking photographic evidence of the flooding and damage to your property will help with your claims assessment and if you need to move damaged or contaminated goods from your house for health and safety reasons” he said.

Tips for recovery:

  • Do not do anything that puts your safety at risk or causes more damage to your property
  • Contact your insurer, or insurance adviser. Do not be concerned if you can’t find your insurance papers. Insurers have electronic records and need only your name and address.
  • Avoid entering flood water, on foot or in a vehicle. Flood water can contain raw sewage and contaminants, can conduct electricity, mask hidden hazards, and pose a serious hazard to health. It may be deeper, or moving faster, than you expect.
  • Try to make the buildings safe and weatherproof but don’t make any emergency repairs unless it is safe to do so.
  • Don’t start non-essential repairs without your insurance company’s approval.
  • If water has entered the property, don't turn on your electricity until it has been inspected by an electrician
  • Do what you have to make your home safe and sanitary.  Remove and discard any water or mud-damaged goods that pose a health risk, such as saturated carpets and soft furnishings.
  • Take photos of damaged property to help speed up the assessments and claims process.
  • Do not drive your vehicle if it has suffered water damage

The extent of the insured damage will not be known for some weeks.

 

Edgecumbe insurance advisory: Temporary Accommodation

The Insurance Council of New Zealand advise people who have uninhabitable homes due to flood damage to contact their insurer directly for help with temporary accommodation.

Most home policies as well as contents policies provide cover for temporary accommodation.  Each policy wording will differ so people should check with their insurer.

Tim Grafton, Insurance Council Chief Executive said “people that are renting and only have contents insurance may not be aware that they probably will also have cover for temporary accommodation”.

Key points from Home policies:

  • Contact your insurer first – they must agree
  • The home needs to be uninhabitable due to loss
  • Covers you and your domestic pets
  • The choice of temporary accommodation needs to be reasonable i.e. a similar standard to your existing house
  • It doesn’t cover additional costs such as travel, letting fees, utilities, meals, phone, internet
  • You are covered, even if the damage to house is under $100k EQC cap
  • Limit of cover will be to a dollar value – each policy is different, so check
  • Some insurers will pay you direct and others you’ll get reimbursed –  discuss with your insurer
  • Some policies will also cover you where your home is otherwise safe and sanitary, but you are prevented from accessing it by order or direction of government or local authorities
  • Reasonable moving or storage costs are covered

To decide what counts as uninhabitable, insurers will assess on a case by case basis and are likely to ask questions such as:

  • Is the home safe and structurally stable?
  • Has a Government/Local Authority issued instructions for you to vacate the home?
  • Is the home secure against theft and outside elements (e.g. watertight?)
  • Can the kitchen and bathroom be used?
  • Can people sleep in the home?
  • Is there water? Electricity?

Key points from Contents policies

  • If you are renting and only have Contents insurance, check with your insurer as most insurers will cover your temporary accommodation
  • The alternative accommodation benefit will likely still require you to contribute your normal rent towards the cost
  • Damage may need to be caused to your contents to be eligible for the temporary accommodation benefit
  • Insurers will also pay for the temporary storage of your contents – including removal and returns.

Reasonable costs of emergency evacuation is also often covered in home and contents policies if the evacuation is due to safety concerns or other emergency and the police or a local authority has advised against you living in your house or you are unable to access your home.  This cover needs to be agreed in advance with your insurer.

Residential body corporates should contact their insurance broker, if they have one, or their insurance company directly.

Risk reduction insurance advisory: North Island heavy rain

With more heavy rain expected today and tomorrow as a result of the remnants of Cyclone Debbie, the Insurance Council of NZ is urging people in the North Island to be prepared for flooding.

“We want to help communities to reduce the risks they face.  If you can get as much of your home contents out of harm’s way, secure heavy outdoor objects and park vehicles in garages if possible” said Tim Grafton Insurance Council Chief Executive.

Pre-flood tips:

  • Move valuables from lower ground including electrical equipment if possible
  • Secure outdoor possessions
  • Have emergency equipment like portable radio, torch, mobile on hand
  • Keep your insurer’s contact numbers on hand

“Taking photographic evidence of the flooding and damage to your property will help with your claims assessment and if you need to move damaged or contaminated goods from your house for health and safety reasons” he said.

Tips for recovery:

  • Do not do anything that puts your safety at risk or causes more damage to your property
  • Contact your insurer, or insurance adviser. Do not be concerned if you can’t find your insurance papers. Insurers have electronic records and need only your name and address.
  • Avoid entering flood water, on foot or in a vehicle. Flood water can contain raw sewage and contaminants, can conduct electricity, mask hidden hazards, and pose a serious hazard to health. It may be deeper, or moving faster, than you expect.
  • Try to make the buildings safe and weatherproof but don’t make any emergency repairs unless it is safe to do so.
  • Don’t start non-essential repairs without your insurance company’s approval.
  • If water has entered the property, don't turn on your electricity until it has been inspected by an electrician
  • Do what you have to make your home safe and sanitary.  Remove and discard any water or mud-damaged goods that pose a health risk, such as saturated carpets and soft furnishings.
  • Take photos of damaged property to help speed up the assessments and claims process.
  • Do not drive your vehicle if it has suffered water damage

The extent of the insured damage will not be known for some weeks.

ICNZ supports IPSA review process

 

The Insurance Council of New Zealand welcomes the review of the legislation that regulates insurers that was announced today. 

The Reserve Bank of New Zealand is the prudential supervisor of insurers in New Zealand and operates under the Insurance Prudential Supervision Act (IPSA) with the purpose of promoting a sound and efficient sector and promoting public confidence in the insurance sector. 

“The Act was passed over six years ago, so it is timely in light of experiences since then and the pace of change in the sector globally to review matters. Ideally, the review should be conducted independently of the Reserve Bank, but the process they have outlined today provides plenty of scope for input,” Insurance Council Chief Executive Tim Grafton said. 

Insurers will have an opportunity to identify issues that they want to be considered and the RBNZ will review those and consult further on policy options that arise.  Further consultation will occur with an exposure draft of proposed legislative changes.  Any new law will not be enacted till 2018 at the earliest and the RBNZ has committed to a transition period to manage any changes. 

“It is pleasing to see that the RBNZ has identified potential issues to address that have been a concern to us such as contracts that appear to be insurance contracts but which are not.  An example is insurance contracts provided by some rental car companies.  Such contracts mislead the public and limit their rights,” Mr Grafton said. 

“This is just one aspect of many substantial issues the first phase of the review raises.  The Insurance Council will be consulting with its members to coordinate an industry response.” 

“We are also keen to see greater transparency and cost-benefit analysis around RBNZ decision-making,” he said.   

 

Majority of November 2016 earthquake claims to be complete by year end

Private insurers plan to have made the majority of cash settlement offers by the end of the year for all commercial and residential claims.  

The 14 November earthquake was not only the most complex of its type, but gave rise to one of the most expensive insured events anywhere in the world in 2016.   In the residential space, claims span the country with the concentration of high volume-low value claims being in Wellington and Christchurch and high value-low volume claims in the top half of the South Island.  We expect the final number of claims to be close to 38,000, so there is a significant challenge in terms of assessment.

“Insurers are working hard to ensure the recovery of communities happens as quickly as possible.  Across the private insurance industry, not including EQC, a total of 330 insurance claims and customer service staff are fully focused on settling claims.  This includes about 170 assessors/loss adjusters with the majority working in the Hurunui, Kāikoura and Marlborough districts” said Insurance Council Chief Executive Tim Grafton. 

“The MOU struck between EQC and insurers makes for a more streamlined approach and that combined with a largely sum insured and cash settlement environment has the ingredients for a relatively quick recovery”, he said. 

These timeframes are broad as each insurer will be communicating with their customers directly about their individual situation.  Large complex commercial claims and domestic managed repairs will take longer than year end but this applies to only a small proportion of claims.  

“Insurers are committed under the Fair Insurance Code to prioritise vulnerable customers with reference to guidelines we helped develop with the Human Rights Commission.  We are also prioritising the most damaged properties and the Code requires our members to update their customers every 20 days on the progress of their claim”, he said. 

Through a series of community meetings, direct customer communication and publicity through local councils, people have been urged to contact their private insurer directly if they need temporary accommodation, have weather tight problems or heating issues so that they can discuss the best approach.  Emergency repairs and heating will come off people's Sum Insured amount but temporary accommodation is a separate benefit under most home and content policies.

 

Insurance advisory: flooding in Upper North Island

The Insurance Council of NZ advises people affected by flood damage with the weather related events in the Upper North Island to contact their insurer as soon as possible.

“After keeping yourself safe, taking photographic evidence of the flooding and damage to your property will help with your claims assessment and if you need to move damaged or contaminated goods from your house for health and safety reasons” said Tim Grafton, Insurance Council Chief Executive.

Tips for recovery:

  • Contact your insurer, or insurance adviser
  • Act safely to prevent more damage to your building
  • Try to make the buildings safe and weatherproof
  • Take pictures of the damage (buildings and contents) for insurance claims
  • Keep all damaged items for inspection
  • Get essential services repaired e.g. water, electricity, gas, sewerage – keep copies of your bills
  • Make a list and take pictures of any perishables you have to dispose of
  • Don’t start non-essential repairs without your insurance company’s approval.
  • If water has entered electrical plugs and sockets it would be advisable to have your electrical systems checked by a licensed electrician.

The extent of the insured damage will not be known for some weeks.  “The priority now is for insurers to get assessors out to communities and get the claims process underway” says Grafton.

With more heavy rain expected today and over the weekend, the Insurance Council of NZ advises people in Northland, Coromandel and Bay of Plenty to get as much of their home contents out of harms ways, secure heavy outdoor objects and park vehicles in garages if possible.

Insurance Council Chief Executive Tim Grafton says “if you have a holiday home in the affected areas and aren’t able to check it yourself, we are advising people to call on their permanent resident neighbours to do that for them if possible”.

“Improving community resilience to extreme weather events is now a priority” he said.  “New Zealand has to plan and adapt in ways that will reduce the impact of natural disasters because every dollar spent in pre-disaster adaptation measures saves many more after the event”.

Insurance Council asks Dunne to come clean on funding emergency services

The Insurance Council of New Zealand is asking Internal Affairs Minister and United Future Leader to come clean about how he would fund a national emergency response service. 

“Mr Dunne is currently proposing a 40% increase on 1 July in the tax that people who insure their properties pay to fund the merger of New Zealand’s fire services under one organisation.  That will come at a heavy cost for some and discourage people from protecting themselves with insurance,” Chief Executive of the Insurance Council Tim Grafton said.

“Now, Mr Dunne is proposing that the newly merged body, Fire and Emergency New Zealand (FENZ), take over all civil defence and ambulance operations around the country.  Unless, there is a commitment to fund FENZ from general taxation for the public good it will provide, it is monstrously unfair to load the burden for running a mega emergency service by taxing those who insure their own property,” he said. 

“This is election year and we challenge all political parties to commit funding our emergency services fairly and sustainably.  Unless this happens, the direction the Minister is proposing will see people not insuring.  If anything has been learned since the Canterbury and Kaikoura earthquakes, it is that New Zealand is one of the riskiest countries in the world for natural disaster losses and that insurance is essential to manage that risk.”

 

First Fair Insurance Code data released

The Insurance Council of New Zealand released today its first Fair Insurance Code annual report of the number of claims received, the number of complaints made to internal and external dispute resolution schemes, along with the number of significant breaches.

Insurance Council Chief Executive Tim Grafton said “Fourteen upheld complaints out of over 1.12 million claims certainly puts in perspective that insurers are meeting high standards of service and resolving almost all claims.” (more…)

Insurers settle $2.7 billion Canterbury claims in 2016

The Insurance Council of New Zealand announced today that private insurers have paid out nearly $2.7 billion in 2016 to settle commercial and residential claims resulting from the 2010 and 2011 Canterbury earthquakes.   Of the $2.7 billion, $1.6 billion was for domestic claims and $1.1 billion was commercial claim payments.

In 2016 private insurers settled 3,860 over cap property claims and had 1,258 new over cap claims transferred from EQC.  Insurers completed construction on 1,470 properties and cash settled 2,390 properties in 2016.  Of the 1,470 properties where construction was completed, 907 were rebuilds and 563 were major repairs.

“A total of 171 properties were transferred to insurers from EQC in the last quarter of 2016, a sharp fall from the 290 the previous quarter. The slow-down of overcaps coming across from EQC and the settlement progress in 2016 is encouraging.  However, it will be critical to ensure the response to the Kaikoura earthquakes does not slow the pace of settlement of the remaining claims as quickly as possible” said Tim Grafton, Chief Executive of the Insurance Council (ICNZ).

Grafton said “insurers have now fully settled $19.4 billion, or 86% of over cap residential Canterbury earthquake claims and 95% of all residential property claims.  Over 95% of Commercial claims have now been settled.”

Based on data jointly collected by ICNZ and the Ministry of Business, Innovation and Employment (MBIE), 89% (23,685) 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 9% (2,283) of the 26,608 over cap claims are in resolution, meaning the rebuild/repair is in the pricing and design process or cash settlement is pending.

Of the properties still to be completed, the number of customers who are still to receive offers from their private insurer is down to 217 and there are 240 properties where people have yet to make decisions on the offers they’ve received, and 183 new claims being validated.

“Customers who have queries or concerns should seek help from the Residential Advisory Service (RAS).  RAS is cost-free, totally independent and can help provide advice and assistance that may help people progress their claim.  This service won’t be around forever and so we are urging people to make contact with the RAS or their insurer if they are unsure about the offer they’ve received” he said.

For further details see this link “Canterbury Earthquake Progress Stats Q4 2016”.