Murky waters for the un-insured
Has the Edgecumbe flooding really been a once-in- 500 years freak event – or a repetition of the bad planning widely blamed for the town’s last flood in 2004?
In due course, an independent review by Sir Michael Cullen will presumably get to the bottom of Edgecumbe’s extreme vulnerability to the elements. Meantime, local residents are trying to restore some normality to their lives.
Some will be far better placed than others to do so. The rule of thumb with natural disasters is that roughly one third of the victims won’t be carrying home or house contents insurance, which is a precondition of help from the Earthquake Commission.
That ‘one third un-insured’ figure was cited by the Insurance Council immediately after the first Christchurch earthquake in September 2010, and the same ratio is now being cited with respect to the Edgecumbe floods.
No point in making the obvious point that people shouldn’t run the risk of not having insurance. That’s like saying everyone should eat well, buy warm houses and save for their retirement. Quite a few people simply can’t afford to future proof themselves. For some, putting food on the table and paying the rent is far more pressing than keeping up their insurance coverage.
Ultimately, children can’t be left to suffer as a result of their parents’ (lack of) choices. Therefore, should the state come to the rescue?
During his first visit to Edgecumbe after the floods hit, Prime Minister Bill English seemed to tell local media that central government would be helping out the un-insured, the elderly and everyone else in need, what with the town having been built in a basin on a flood plain, and apparently with inadequate stopbanks. Once back in Wellington though, English was sounding a lot less compassionate when asked whether his government would be coming to the aid of the un-insured.
‘‘No,’’ English told his postCabinet press conference, ‘‘I wouldn’t have any particular expectation about that.’’
Not surprisingly with a National government, farmers have seemed to be at the front of the assistance queue. Primary Industries Minister Nathan Guy quickly outlined a package of assistance to the rural community. Local firms, by contrast, are going to have to wait for their support package.
The harsh reality is that the hardest hit areas of Edgecumbe are likely to contain most of the residents having no (or insufficient) insurance cover.
Thankfully, even the uninsured qualify for the extra funds being made disbursed in civil defence payments, via MSD. However, the individuals and families affected are likely to be facing costs beyond the subsistence levels at which the available assistance tends to be set.