Quake claim delay takes toll
Unit owner Maria Hayward says the earthquake claim process for people like her has dragged on for years too long.
She owned one unit in a row of five near Christchurch’s St Albans Park. The units were damaged in the 2010 and 2011 Canterbury earthquakes.
They were being rebuilt, but Hayward said the lengthy process cost her relationship, job and health. ‘‘I’ve been an outpatient at Hillmorton [Hospital] over this.’’
Insurers say they are making good progress settling one of the last domains of difficult earthquake claims, nearly seven years on from the first Canterbury tremor.
Multi-unit buildings (MUBs) are single buildings containing two or more dwellings, such as blocks of flats, townhouses and rest homes. They have typically been a slow-moving area for quake insurance settlements.
The complications in Hayward’s building began almost immediately after the September 2010 earthquake, she said.
Two of the units received settlements from the Earthquake Commission (EQC) and completed repairs.
Her unit had not had its first assessment when the February 2011 earthquake hit. This led to delays in the settlement process, Hayward said, because the units were at different stages, but needed to be considered as a whole building.
To add to the confusion, Hayward’s unit had a different address from the others because it was on a corner and accessed from a different road.
She said she was now dealing with problems with builders and land quality, and wished it had all been settled years ago. ‘‘My situation, probably, they would use as an example of a positive, because all the insurance companies did get on board and nominate [a lead insurer] to run it.’’
EQC had resolved claims for about 10,000 MUBs through cash settlements, repairs or referring them to private insurers. The insurer has fewer than 15 left.
Private insurers have resolved claims for 1755 or 72 per cent of the 2433 MUBs brought to them to date. The Residential Advisory Service (RAS) has settled 115 MUB cases – 69 per cent of all such claims brought to the service.
MUB claims could be problematic when the units had different owners, with different insurers. Difficulties include owners living overseas, units having different levels of damage, owners disagreeing on whether to repair or rebuild the overall building, or one or more owners not having the money to pitch in for reinstatement.
Insurance Council operations manager Terry Jordan said insurers established the Shared Property Project in 2013 to deal with MUBs.
He said insurers realised they had to ‘‘throw the rule book out the window and start from scratch’’. They agreed to appoint a ‘‘lead insurer’’ – like in Hayward’s case – and independent loss adjustor for each site, funded by all the involved insurers.
They agreed not to make claims against each other for ‘‘collateral damage’’ caused to neighbouring units during repairs – something Jordan said would have added years to the settlement process.