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.

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