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.

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