By now many of my readers would have read my previous post regarding the earthquakes in Christchurch and will have an understanding of what is happening. Some of my readers are from Christchurch, many of them still living in the City and dealing with the on-going daily stress associated with this. So far there have been troubles with the EQC (The Earthquake Commission), for those readers from overseas you can learn more about the EQC’s role in all of this by visiting their website. In essence the EQC was founded in 1945 to cover people during natural disasters, it has been funded by collecting premiums through insurance payers and offers up to $100,000 towards damages. However, there have been many problems with claims since the earthquakes in September last year, and February and June this year, many people still remain unpaid for their claims going back to September, many builders, plumbers and others associated with fixing peoples homes remain unpaid by the EQC. To add to the already frustrating situation that is unfolding in Christchurch, it would seem that the insurance companies are now jumping on the bandwagon and defaulting on paying a number of home owners, specifically those within the Red Zone. Residents in this zone learnt last week that the suburbs they live in, that fall within this area will be completely demolished with no hope of rebuilding them in the future. The government has offered home owners compensation packages with two options, one the can take the full amount of the government valuation on their property, or they can take compensation for the land their home sits on and receive their insurance pay-out for their actual house.
Now in essence this has made many people happy as they have now received the closure they so desperately needed and can now move on with making the appropriate plans for their future. There are homes though within the red zone that are only in need of repairs. However, the government has made the decision that all those suburbs must go because they are built on unstable land that is not sustainable for future homes or rebuilding of homes. This is where these insurance companies have managed to find a loophole in order to somehow get out of paying for the full insurance value of the home. These insurance companies have stated that they are prepared to repair these homes that need it, but they will not cover them for the full replacement value of the home despite the fact that they fall within the area that is ordered by the government to be demolished. In other words these insurance players actually have full replacement policies, they are entitled to it but the insurers have stated “they won't replace their homes, they'll only repair them, even though they're earmarked for certain demolition” (Campbell Live). This has left many home owners in the red zone that have been faced with this new information from their insurance companies wishing that, A) their homes had sustained worst damage in the three major earthquakes or B) hoping for another large quake to destroy their home further in order to be paid out what they are owed. How awful is that these people have been left hoping for desperate measures and further destruction of their homes, city and lives.
What amazes me is that a lot of these people have been paying insurance for the majority of their adult lives, for some people like my grandfather he has lived in the same house and owned it for fifty years, so what has happened to all that money he has paid in that time. Why are insurance companies baulking at having to pay out so much money? Its my estimation that there isn't enough money in the coffers to accommodate everybody, which highlights the question where is everyone's money? Something needs to be done to stop these insurance companies from ripping off their consumers, surely under certain legislation such as the Fair Trading Act 1986 and the Consumer Guarantees Act 1993 there are laws that are being broken, the government needs to step in and perhaps make changes to the way that insurance companies are able to operate. It is my opinion that there needs to be even more regulation within the insurance industry.
According to the Insurance Council of New Zealand (ICNZ) there is the fair insurance code which states the following:
While the Insurance Council assumes no liability for its members, compliance with the self-regulation framework assures customers of quality service. Insurance is a contract between the insurer and the customer based on the principle of "good faith". The customer (by paying a premium) depends on the insurer to provide a service and to settle claims fairly and efficiently. In turn, the insurer relies on the customer to act honestly, and to accurately disclose all information relevant to the insurer being able to provide insurance cover that meets the customer's needs.
The Fair Insurance Code was developed by the Insurance Council as a set of principles which aims to continually improve the standard of practice and service member companies provide to their customers. This set of principles is in additional to those obligations created by the law.
By the look of things the quality of service is lacking, claims are NOT being settled fairly and efficiently and the standard of practice and service is non existent. Those effected by this ridiculous newly announced policy of many insurance companies need to fight for their claims and their rights that are pursuant to the various legislations that are put in place to protect both the consumer and insurance customers. We need to demand that the government makes changes to both the legislation set forth and the regulation of this industry to protect future victims of natural disasters. Watch this space and lets see what happens.
No comments:
Post a Comment