Most earthquake claims now on track
Insurance companies say most November earthquake claims will be settled this year, strengthening their case to manage all Earthquake Commission (EQC) claims in future.
The Insurance Council said private insurers have settled 69 per cent of residential and commercial claims from the quake, which was centred near Kaiko¯ ura and Waiau in North Canterbury.
It expects 75 per cent to be settled by the end of this year.
In a deal done with EQC after the earthquake, insurance companies took over the assessment and settlement of building and contents claims and are billing the commission for its share upon settlement. Property damaged was mainly in the upper South Island and Wellington areas.
A small percentage of claims, some lodged early plus those for land damage, remain in the hands of EQC.
In the 2010 and 2011 Canterbury earthquakes, insurers handled claims only after they had been assessed by EQC as over its $115,000 cap (including GST).
Insurance Council chief executive Tim Grafton said they were ‘‘very pleased’’ with the rate of progress from the November quake.
‘‘We believe this is the model for future, as it has proven to deliver efficiencies for everyone by reducing double handling and speeding up settlements,’’ he said.
Treasury is reviewing the EQC Act.
Grafton said the new Government had the opportunity to change the rules so private insurers would assess and manage all claims in future.
‘‘Private insurers have been settling at a rate of about 10 per cent per month, so we are confident we will have the majority of claims closed out by the end of the year,’’ he said.
The council’s figures for the November earthquake say that by the end of October, 91 per cent of all residential assessments were complete, 65 per cent of building claims settled, and 92 per cent of home contents claims settled.
Private insurers have received over 44,000 claims, of which over 39,000 are for residential home and contents claims.
For commercial claims, 80 per cent of claims worth over $547 million were fully or partially settled by the end of October.
The total value of claims for the quake was over $2 billion, comprising $1.47b of commercial claims and $600m of residential claims. Christchurch recorded the most claims, followed by Marlborough and then Wellington.
EQC customer and claims manager Trish Keith said they had paid $168.8m to private insurers managing its customers for the November earthquake, and $28.4m to customers managed by EQC.
Of the 5400 claims it is managing directly for land and claims open from previous events, 400, or 7 per cent, were left to settle, she said.
‘‘EQC recognises that there is work to be done before everyone’s claim is assessed and settled.
‘‘While we have made significant progress, all of our customers can be assured that EQC will continue working to settle their claim and provide all necessary support and information until the job is finished.’’