1. THE STANDARD

2. COMPLY WITH APPLICABLE LAWS

3. ENABLING WORKS

4. CASH PAYMENT

#1 THE

STANDARD

War Damages Act 1941-44

“property or any part thereof.. destroyed or damaged…is insured to any amount under any contract of fire insurance made in New Zealand with an insurance company…the property shall at all times be insured under this Act to the same amount against war damage”

Earthquake and War Damages Act 1944-1993

“to the same amount against earthquake

damage and war damage”

Standard aligned to your Private Insurance Fire

Policy

Divergence from Fire Insurance

Commission of Inquiry into the Abbotsford Landslip Disaster 1980- Land cover recommended-“Declaration of Value” (sum insured) recommended for dwellings

A Review of Natural Disaster Insurance Arrangements, Aon 1987- Replacement Value -“free market forces should prevail”…government may be able to withdraw”

Disaster Insurance Bill 1989 (DIC)-Replacement Value (undefined)“every owner of a home shall ensure that the home is insured at all times for replacement under any earthquake cover policy issued by an insurance company or the Commission”

Earthquake Commission Act 1993Replacement Value but $100k cap“replacing or reinstating the building to a condition substantially the same as but not better or more extensive than its condition when new, modified as necessary to comply with any applicable laws”

Convergence with Fire

Insurance

1. When New 2. Comply with any applicable

laws

BUT

Oct 11“return to pre-earthquake

condition”

2009: “Claims were settled to standards of individual and overall fairness perceived as acceptable by the public”

#2 APPLICABLE

LAWS

December 2010: “Pre-earthquake”

“Reinsurers have suffered significant loss as a result of these earthquakes. More discussion is required by the EAG with the Insurance Council and Government if we are to effect any satisfactory way forward”

Relaxation

“Guidance advantages:

reduced costs for earthquake repairs

for insurers”

“Spending too much in Canterbury”

“Concentrate on cost control”

#3 ENABLING

WORKS

“it is necessary to do work on an undamaged part

of the house”

Land, Land, Land

Foundations, Foundations, Foundations

“The preferred method…has led to a material reduction in the estimated land

liability”

#4 CASH PAYMENT

reasonably sufficient

A) Cash payment = When NewB) Fletcher EQR Managed Repair = When New (but only reasonably sufficient)

TOP 10 TIPS

1. If their lips are moving

they are lying to you

2. Forget the MBIE “Guidance” for

assessment of EQ damage

(it was to save $ for insurers/EQC)

3. Land, Land, LandFoundations, Foundations, Foundations.

4. It’s all about the Brief (instruction/ proposal/ terms/

conditions)

5. Fletcher/ staff are all employees of

EQC – its all about EQC

 

6. Ask for it in writing

7. Get good

advice

8. Their main tool is

delay

9. You can reopen your EQC claim

10. It’s up to YOU

1. The only STANDARD that matters to EQC and Insurers is the standard of “Public Perception” the law is secondary.

1. Govt. controls both EQC and the APPLICABLE LAWS – a dangerous cocktail – never mix your drinks – you will get a hangover.

2. The biggest cost, due to ENABLING WORKS, is fixing your land and foundation damage – but these are covered by EQC

3. The Fletcher repair programme is a rushed and botched attempt to use the “reasonably sufficient” caveat to save $, rather than CASH SETTLE

Where are they?