Canterbury Earthquakes FAQs
Frequently Asked Questions
- I would like to make a complaint about my insurer. How do I do this?
- I can't get insurance for my house and contents in Canterbury. Can the ISO help?
- EQC says my house is a "total loss", but my insurer says it can be repaired. How can this be?
- How can my house be deemed to be repairable when it is in the red zone?
- I want to rebuild in a different city in New Zealand. Is this ok?
- What exactly is meant by the "floor area" of my house for insurance purposes?
- If the floor area of my house was wrong when I arranged insurance, can I negotiate with my insurer over this?
- Why are there on-going delays with repairing/rebuilding my house?
- Do I have to pay excesses to EQC and my insurer when both are involved?
- I want to complain about EQC. How do I go about this?
- Who decides whether to repair, rebuild/replace, or cash settle claims?
- I disagree with the repair/rebuild costs provided by my insurer. What can I do?
- My insurer says it will replace my house. However, the plans for the new house show chipboard with carpet for the floors. My house had rimu floors. Can I make the insurer put in rimu floors in the new house?
- Can my insurer deduct the cost of temporary repairs to my house from my temporary accommodation allowance?
- My business interruption insurance payments are about to finish. Can I extend them?
- Why are my premiums so high this year in comparison with other years?
- Can I do anything about my increased premiums?
Before the ISO can consider any complaint, the matter must have been through the insurer’s internal complaints process and reached “deadlock”. This means that the insurer cannot resolve your complaint. If you get to “deadlock”, you can bring the complaint to the ISO within 2 months. Have a look at Making a Complaint to the ISO.
2. I can't get insurance for my house and contents in Canterbury. Can the ISO help?
It is very difficult to get new insurance cover in Canterbury. The decision by insurers about who to offer cover to is not something the ISO can consider. The ISO cannot make insurers provide insurance cover to everyone who wants it.
The only advice the ISO can give you is that if you are unable to arrange cover by calling various companies, you should speak to one of the bigger brokers in Canterbury who may be able to get you limited cover. In order to get even limited cover, you may have to provide the insurer with additional information, such as geo-tech reports.
3. EQC says my house is a "total loss", but my insurer says it can be repaired. How can this be?
EQC refers to a “total loss” if the damage to your house is more than the cover EQC provides, which is $100,000 + GST. Your insurer provides cover for earthquake damage to your house over the $100,000 limit. If your insurer says your house is repairable, it does not mean it disagrees with EQC, it just means that the insurer believes it is economic to repair.
4. How can my house be deemed to be repairable when it is in the red zone?
Your insurer insures your house and other structures and your land is insured by EQC. Your insurer will have completed a detailed assessment of your property based on what it would do to reinstate the house, fences and driveway, had the government remediated the land.
Your insurer will have factored in all costs that would be incurred to get a building consent. Based on these total costs, your insurer determined whether the house was economic to repair and, therefore, deemed a rebuild or repair.
The government has indicated there is no immediate intention to remediate land in the residential red zone. This is why the government developed Option 1, which is a cash settlement for both land and house based on the most recent rateable value for your property.
This is a matter you have to discuss with your insurer. If your insurer agrees and if your policy allows, your insurer will build you a like-for-like house, using modern materials and methods, on land that you purchase. Your insurer will not pay more than it would have done, if the house was rebuilt like-for-like on the original site.
If this is an option that you are considering, you should contact your insurer to see what costs are likely to be covered under your policy.
The floor area is the outside measurement of the house, including all levels, garaging and developed basement.
7. If the floor area of my house was wrong when I arranged insurance, can I negotiate with my insurer over this?
This would be unlikely, if the actual floor area is greater than the floor area which was noted on your insurance schedule. This is because your insurer has provided cover based on the floor area advised to it when you arranged cover. Your premium and the cover offered under the policy were calculated on this information.
Because of on-going seismic activity, insurers are reluctant to commence reinstatement work only to have it damaged again. Some matters are outside your insurer’s control, such as government requirements for further geo-tech reports, particularly in relation to foundation work.
Unfortunately, you have to pay excesses to EQC in terms of the Earthquake Commission Act 1993 and to your insurer in terms of your policy. Separate EQC excesses apply to land, property and contents.
EQC is not a Participant in the Insurance & Savings Ombudsman Scheme Inc. If you have an issue or complaint about EQC, you should first raise the issue with EQC. Have a look at their website page about Complaints. If you are not happy with the outcome of your discussions with EQC, then you can make a complaint to the Office of the Ombudsmen.
11. Who decides whether to repair, rebuild/replace, or cash settle claims?
Generally speaking, this is the insurer’s decision. However, you can work with your insurer to determine what is best for your circumstances, in line with options set out in your policy.
12. I disagree with the repair/rebuild costs provided by my insurer. What can I do?
Most insurers are using large building companies to provide quotes, repairs and to rebuild houses. These large companies may well be able to reduce costs through their large buying power. However, if you would like to challenge the costs provided by your insurer, you could get your own scope of works at your own cost from a master builder, loss adjuster, or quantity surveyor. You could use this report as the basis for your discussions with your insurer regarding costs.
13. My insurer says it will replace my house. However, the plans for the new house show chipboard with carpet for the floors. My house had rimu floors. Can I make the insurer put in rimu floors in the new house?
Unfortunately, no. Under most insurance policies replacement is on the basis of “current materials and methods”. This means that you will not necessarily get an exact replacement of the finishes you had in your house in a new house. If you think that your house had special features and/or you would like specific materials used in the new house, you should raise this with your insurer. However, unless the materials you are requesting are considered “current materials”, then it is likely that your insurer will not be obliged under the policy to rebuild using those materials.
14. Can my insurer deduct the cost of temporary repairs to my house from my temporary accommodation allowance?
Temporary repairs are carried out to enable you to continue living in your house. While you are living in the house, you will not be incurring any alternative accommodation costs. When permanent repairs are made to the house and you incur alternative accommodation costs, your insurer is entitled to deduct the temporary repair costs from the accommodation allowance provided for in the policy.
Your insurance policy will set out the period during which you will receive payments for a claim - typically 6 months, or a year. Unless your insurer offers to extend the period, the payments will end at the end of the period stated in your policy.
In the Asia Pacific region, there have been several major and very expensive insurance events over the last few years: flooding in Australia, earthquakes in New Zealand, and a tsunami in Japan. These have had a huge impact on the global reinsurers, who have been called upon to pay for the resulting damage. Earthquake claims here have had a significant effect on how much overseas reinsurers are charging insurers in New Zealand for reinsurance this year. Commercial properties and apartment blocks around the country have been hit particularly hard, because of fears a natural disaster could mean increased losses for insurers and, consequently, the reinsurers. The whole of New Zealand is now considered a significant insurance risk.
17. Can I do anything about my increased premiums?