The Insurance Council of New Zealand (ICNZ) is expecting to get more specific information on the number of over cap claims the industry can expect to receive in the coming year by the end of March.
ICNZ CEO Tim Grafton said with 744 new cases coming through to insurance companies in the last quarter the momentum was increasing rather than winding down.
“We’ve had 2000 come over cap in the last 12 months which is a reasonably significant increase to the properties we have to manage.
“It’s a difficult and frustrating situation particularly for those property owners who are only now coming to their insurer to start on the rebuild or repair of their property, but also it’s a difficult situation handling people who are clearly frustrated. So there are challenges to try and do your very best for them as soon as possible.”
He said analysis of the over caps that had come across so far revealed about 70% were stand alone units, as opposed to multi-unit properties which the industry already had some knowledge of.
“We wonder how many of those are yet to come across over the next 12 months,” he said.
“We have engaged with EQC and they have been constructive and positive about dealing with some urgency work on their book to give us a greater certainty and clarity about what may lie ahead over the next 12 months.
“EQC is looking through a few thousand properties manually and we’re looking forward to getting a better handle on that in the next few weeks.”
Grafton said while ICNZ appreciated 744 was a small percentage compared to EQC’s total book the delays raised stark questions about future claims assessment in the event of another catastrophe.
Comparing commercial and out of scope settlement rates, which weren’t subjected to the EQC process, served as a sharp contrast.
Out of Scope claims settled – 53,698 or 84%
Commercial claims settled – 83%
Over cap claims settled – 57% (10,676 or 45% cash settled; 2,890 construction completed)
Said Grafton: “What we’re getting with properties going over cap four years later are properties that were incorrectly assessed early on in the process. It’s when the builders start to look at the repairs that are required that they start to unearth major problems with properties which then sends them over cap.
“What we’ve got to do in the future is look at improving the quality of assessment and make the claims management process a lot more efficient and straightforward if there were a future event.”
He added: “Again, we’ve been talking constructively with EQC about how we would manage a future event but also we will make a further submission to Government on the EQC review around some thoughts we are putting together now to improve the process.”
Grafton would not be drawn on any further detail on this as work was still being done with ICNZ members.
Other key statistics:
- The total number of over cap domestic claims is now 23,925, up 744 from 23,181 in Q3 2014.
- There were 1,105 over cap claims settled in Q4 2014, compared to 1,069 settled in Q3 2014.
- In 2014, 4,447 over cap claims were settled but 1,963 new over cap claims were transferred from EQC.
- Private insurers have paid out almost $14 billion in settling Canterbury claims.
“We’ve got momentum going so the progress rate is good and if it can be better that would be good too,” Grafton said, however he added: “We want to ensure that the reinstatement is going well, it’s not all about speed but quality of repair as well.”