Excuses

It's been two years. And Christchurch insurers might just start getting around to sorting out peoples' claims.

The Insurance Council says insurers are about to ramp up the earthquake recovery process in Christchurch.

About 70% of residential insurance claims from the 2011 February earthquake, requiring major repairs or a rebuild, still need to be dealt with.

Insurance Council chief executive Tim Grafton said insurers have been able to start dealing with a majority of claims only in the last six months.

He said the hold-up was due to technical land damage assessments being available just nine months ago and ongoing earthquakes.

A progress report issued on Wednesday shows insurers have distributed $6.7 billion in commercial and residential claims in Canterbury.

Some insurers have set deadlines which will see most homes rebuilt or repaired by the end of 2015.

I'm calling BS. Sure, there are some major repairs that couldn't be undertaken without a land assessment, and others where the risk of ongoing aftershocks meant it wasn't worth starting out. But that's hardly been the binding constraint in at least a few cases.

We were insured with AMI before the earthquakes, now Southern Response.* We filed a claim with them immediately after the February 2011 event for damage to sidewalks, driveway, a wall and the pool. The kind of stuff that doesn't require anything tough to sort out: re-set the stone wall by the driveway, dig out the sidewalk where it's cracked and heaved up 4 inches, remove cracked cement paths and re-pour (or repair), re-do the swimming pool liner, severely twisted in the quake, and seal up some cracks in the driveway.

All of these count as "out-of-scope" claims - things not covered by EQC. No complicated "what part belongs to EQC, what part belongs to the private insurer". And no complicated land stuff to deal with.

When last I talked with Southern Response in October 2012, they said somebody would come to see me within the next two years.

If it takes two to four years to sort out repairs after an insured event, are you running an insurance company or a confidence scam?

We've not been on the phone hounding them every day which seems the only way to get any claim progressed through the system. The stuff we need done is pretty minor in the grand scheme of things and we don't want to displace people who have holes in their roofs. But there is absolutely positively zero chance that anything involving our claim is held up due to technical land assessments and ongoing aftershocks. They've just put everything out-of-scope to the back of the queue while dealing with the claims where they're having to sort stuff out with EQC. Fair enough (although they would have done better to hire more staff to process things more quickly).

But if everything were held up because of land assessments and aftershocks, they would have sorted out the simple stuff where that wasn't an issue and they haven't. I can't tell if it's incompetence, if they're deliberately delaying hoping that people give up, or if they're managing their cash flow.

On the positive side, AMI / Southern Response dealt quickly and reasonably with our claim for rental coverage when we spent a bit over a month in Wigram after the February quake.

Insurance in Christchurch feels like a huge scam. Minor stuff like dinging your car - that's all fine. But any serious systemic shock will always wind up bringing changes in government regs around building codes and the like that make eminently unclear just what was insured and tie things up in the courts for a couple years. I can sympathise with the insurers on some of this: they weren't writing policies on the risk of Council requiring more expensive building methods. And I like that they're consequently moving to capped total value contracts rather than full replacement cover - it should reduce, but not eliminate, post-event shenanigans. But even where that's completely not an issue, like at our place, they have utterly failed to get their act together.

Update: our EQC opt-out case sits where it has since before Christmas... waiting for EQC to sign off on our builder's costings. But at least we've had our meeting at the house with EQC and the builder.

* Quake claims are being dealt with by Southern Response, spun out of AMI when AMI was sold on to IAG.