New code slammed by earthquake blogger

The newly revised Fair Insurance Code has received a detailed mauling on a Canterbury blog page, which has been resurrected to review it.

New code slammed by earthquake blogger

Insurance News

By Maryvonne Gray

A popular Christchurch blogger has resurrected his weblog in order to run a series of posts giving an in-depth critique of the revised Fair Insurance Code, which he says puts customers at risk.

Lawrence Roberts, author of the Avonside blog, had put the site into recess in August 2013.

But after a number of insurance related developments this month, the most significant being the new Fair Insurance Code, he felt there were a number of issues that needed to be addressed, and ignoring them would be ‘a dangerous oversight'.

“Dangerous because post-earthquake insurance claims created an environment which highlighted both new and existing problems, and these have not been dealt with,” Roberts said.

“There is a continual stacking of the document with content that favours insurers and puts customers at risk,” he continued.
For example, Roberts dismissed the industry’s use of the phrase ‘utmost good faith’, calling it a one way street in which customers are obliged to act in this way, but not insurers.

“So, if you, the customer, fail to disclose or understand something, that action is likely to be held against you and jeopardise your claim.

“What if you didn’t know something was important, might cause the insurer to alter the terms and conditions of the contract, misunderstood or just didn’t know?

“You are at the mercy of the insurer who, in signing up to the Revised Code, now agrees to being ‘reasonable’ when dealing with you. As there has been an absence of reasonableness with many claims to date this is not a cause for optimism.”

Similarly, he took issue with the reference to insurers ‘treating you fairly’.

“An insurance policy is a legal contract and, whenever a claim is made, what follows is determined by the legal meaning of the contract.

“The use of ‘fairly’ is somewhat cynical and could be considered calculated to create a confused mindset that in some way insurance claims are now about what is fair, and not driven by upsetting legal interpretations. Puffery with dire consequences?”

Roberts also pointed to Section 8 of the FAQ accompanying the Code, which, he said, ‘excuses insurers’ from making an effort to provide lists of required information or summaries of policy wordings.

“In the absence of suitable lists and explanations, customers, who are not experienced with insurance contracts, are being put at risk,” he said, adding that those not proficient in English would be even worse off.

He said there was no mention in the Revised Code of the insurer’s obligation to act in the best interests of the customer.
“Where is the commitment to ensuring that, in fulfilling a claim through to completion (eg repair or rebuild), the insurer will protect the interests of the customer by ensuring the whole process is efficient, of a satisfactory specification and quality, and does not put the customer to unnecessary delay, expense or stress?” he said.

“The Revised Code is superficial, creates the appearance of fairness, but does nothing to ensure that the customer is informed, empowered, or protected to any useful degree. The Revised Code is motivated more to stave off any legislation of insurance activity than correcting the shortcomings of insurers and protecting customers.”

To follow Roberts’ study of the Code, which continues today, visit

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