NonEQC streamlined claims deal better
AUCKLAND: Owners of property damaged by a natural disaster will only have to deal with their insurer after June next year after the Earthquake Commission agreed to allow claims to be dealt with by private insurers.
The change, which will come into force during the second quarter of 2021, will aim to avoid the disastrous situation which followed the 2010 and 2011 Canterbury earthquakes in which there was double and sometimes triple handling of claims and assessments as consumers were bounced back and forth between the EQC and insurers.
Under the new partnership anyone with home insurance whose home or land is damaged in a natural disaster will only need to lodge one claim through their private insurer.
Tim Grafton, chief executive of the Insurance Council of New Zealand, said the change would ensure a more effective and efficient response, delivering simplicity and certainty for customers during a very stressful time.
‘‘Customers must always come first and developing these arrangements in partnership with EQC will ensure New Zealand has one of the best natural disaster response platforms in the world,’’ he said.
Eight private insurance companies — AA Insurance, Chubb, FMG, Ando (Hollard),
IAG, MAS, Vero and Tower — have worked with EQC on the partnership model.
Mr Grafton said it had been working on a change to the way natural disaster claims were handled since the November 2016 Kaikoura quake.
‘‘[At the time] we approached EQC and said we have got a major disaster on our hands — we know the Canterbury situation could be improved, so in this rapid space of a few weeks we put together a response where largely private insurers managed and settled the claims out of Kaikoura.’’
Mr Grafton said the success of that and the recent use of the model during floods in Northland prompted it to push for it to become the permanent way of handling claims.
‘‘Over the last several months we have been engaged through the lockdown period in quite a lot of work in getting to an overarching agreement to cover the response if there was a major disaster. And now we are going through the details insurer by insurer. To confirm arrangements and commercial arrangements too that need to be put in place.’’
Mr Grafton said the agreement would significantly speed up the claims process.
‘‘What it immediately removes is duplicate, triplicate assessments, and potentially differences between EQC and insurer assessments so it streamlines that. It removes the potential for dispute which leads to delay.
‘‘It is going to be a quicker process, better claims experience process from a consumer point of view,’’