No more double-handling - Agreement between EQC and the insurers
[Post from 14 December 2016]
In an effort to make the earthquake insurance claim process easier, ICNZ and EQC have signed a memorandum of understanding with EQC to allow private insurers to act as agents to receive, assess and settle home and contents claims for their customers.
Under the Earthquake Commission Act 1993, if you have suffered more than $100,000 worth of damage, EQC will pay you that amount and you are then passed to your private insurer to address the value of the damage exceeding $100,000. Traditionally, this meant that EQC would first assess your property to determine whether your claim was worth less or more than the $100,000 cap. If your property was ‘over-cap’, the claim would then be assessed again by your private insurer to provide a settlement offer based on your insurance policy. Unfortunately, this process contributed to the significant delays in the settlement of Christchurch earthquake claims, with even the insurance companies, such as Tower, calling the system ‘broken’.
ICNZ and EQC believe this approach will see a faster and more efficient settlement process by reducing the double-handling of larger claims. The process followed by insurers has also traditionally been more comprehensive, and provides a greater deal of support for clients.
However, it remains crucial that you provide your own evidence to prove your loss, ideally through photos and expert evidence.* Substantial differences of opinion as to the claim’s value are common. The more evidence you have, the better you are positioned should a dispute arise. How the working relationship between EQC and the insurer will work in the event of a disagreement as to the repair methodology or cost to reinstate your property is yet to be determined, and it may require a more flexible approach from the insurer.
We have learned a lot since the Canterbury earthquakes, and the double-handling or insurance claims was responsible for a substantial amount of the delay and stress to the settlement process. Hopefully the changes will not only speed up the process, but will help ensure a fair and reasonable settlement for all those involved.
If you have any concerns regarding this process or would like to seek advice on your insurance policy, don’t hesitate to contact a member of the litigation team on (03) 365 1347.
*see http://gcalawyers.co.nz/blog-2/earthquakes-what-to-do/ for more information.