​Brokers charged up for power cut claims

​Brokers charged up for power cut claims | Insurance Business

​Brokers charged up for power cut claims
Auckland brokers are expecting most of their clients affected by this week’s power cuts to be left disappointed due to their insurance policies not kicking in for the time period in question.

A substation fire on Sunday morning left up to 85,000 households and businesses mainly in the city’s eastern suburbs without power, although many were back on within 24 hours.

Unfortunately for those businessowners hoping to claim on their Business Interruption policy, the excess period on most policies is 24 hours, with some running to 48 hours, leaving the insured having to pick up the expense.

Bigger broker companies such as Marsh and Crombie Lockwood had readied themselves for more claims than have so far eventuated.

Marsh spokeswoman Denise Moller said people could still be sorting out their immediate situation before they get on to working out their claim.

“We just have to take it as it comes,” she said. “At this stage there has been a very low level of enquiry so we’re just waiting to see what happens over the next couple of days when people fully realise the impact on their business.”

Similarly, Crombie Lockwood head of claims Myles Noble said: “We have not received commercial claim volumes of any significance over this event to date but have had many enquiries as to what cover is available for businesses.”

Meanwhile, some smaller outfits have been fielding numerous calls from clients checking if their predicament could be claimed under their cover.

Montage Financial Services manager of general insurance, William O’Brien, said they had some clients with businesses based at shopping centre Sylvia Park.

“But unfortunately their coverage had a 48 hour stand down,” he said. “There have also been some cafes which have had to close who did have a 24 hour period but again with food spoilage most of it has been under the $500 excess that most people have got.

“It’s not very nice for them because they rang up to try and they have been left frustrated. Some are asking if they should approach the power companies,” he added.

Apex Insurance managing director James McGhie said most of their notifications have been BI related but again, most of their clients were up and running within the 24 hours so wouldn’t have a valid claim.

“If there’s any stock, refrigerated or frozen goods, that would be a claim if the stock is damaged,” he said.

“From a personal lines perspective going through and quantifying baked goods is hard and probably a lot of hassle working out what’s lost.”

Ellerslie-based broker Nigel Ward, who works for the firm Harden & Hart, said their premises had lost power but it was back on by Monday morning.

About a third of their commercial clients affected had spoilage-related claims but they certainly hadn’t been inundated, he said.

“With our private clients, some are away for the school holidays so it’s possible we may get more claims through once they get back and check their freezers.”

He said some BI policies that hadn’t been activated due to the stand down period may be activated if the spoilage curtailed the turnover, such as an ice cream shop or supermarket.
“Other issues that may crop up could be damage to carpet or flooring if water leaks out of defrosting freezers, for example.”

Luxor Insurance Brokers, who have an office in Meadowbank, only got their power back in the early hours of yesterday.

A spokesperson said despite having to work in the dark, it had been an opportunity to catch up on filing.

Insurance Council of New Zealand (ICNZ) CEO Tim Grafton said insurance companies could possibly sue the power companies for compensation to recover any payouts, but they would have to prove negligence was involved.

Meanwhile, Vector CEO Simon MacKenzie was reported by Fairfax Media as saying it was too early to tell whether there would be compensation provided to businesses and residents.

Until repairs were completed it was not clear what the insurance claim would be or who was liable, he said.