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Insurance hassles wear down Cantabrians

More Cantabrians are seeking help to resolve earthquake insurance claims.

Canterbury Insurance Assistance Service project facilitator Lorraine Guthrie says more focus and more funding is required to speed things up.

According to inquiries by NBR, there are still 13,900 repairs to be completed under EQC’s repair programme managed by Fletchers for properties with less than $100,000 damage.

Private insurers are managing another 9759 repairs or rebuilds worth more than $100,000, plus another 3084 settlements to be resolved.

Canterbury Insurance Assistance Service was commenting on the results of a Canterbury District Health Board research survey of 800 people, called the All Right project.

It reveals greater stress levels than two years ago as exhaustion over insurance wrangles sets in.

Mental health services have experienced a 35% surge of new patients since 2011 for psychiatric emergency services, and a 40% demand increase for child and youth community mental health services.

"Every month we see an average of 400 patients needing emergency psychiatric treatment," health board chief executive David Meates says.

He thinks they are the just tip of the iceberg.

There are significant differences in the wellbeing of Christchurch residents who have had their insurance claims settled and those who haven’t, according to the survey.

Canterbury Insurance Assistance Service is working with around 80 claimants currently using $200,000 in funding from the Christchurch City Council ($200,000).

Facilitator Ms Guthrie says the stress and strain after more than three years is very evident in the clients they work with.

They are overwhelmed by the information collated over the past few years to the point they can no longer make sense of it, and they are highly stressed and under increasing financial pressure.

She says family relationships are affected and many clients have lost trust and confidence “in virtually everyone.”

CIAS welcomes contact from homeowners via the website at www.cias.org.nz.

c.hutch@clear.net.nz

More by Chris Hutching

Comments and questions
5

In the event a consumer buys a lower value faulty good or service up to 15k the CGA allows a low cost claim to be processed in the Disputes Tribunal. It is quick, fair and efficient

This model needs to be extended to higher value goods or services, I mean especially insurance disputes. Insurer staff have no personal relationship with the end user and are directed to purposely screw with detail to limit fair payouts, the result is as above.

Remember, this could be Auckland or Wellington or any where in NZ at anytime.

Having been involved in the earthquake claim, the insurer in my case preferred a cash payout. Anyone watching the various building shows on TV or involved in building themselves knows cost estimates are never on target.

A deal is deal and if full replacement or repair is what an insurer offered they need to stick to the deal, insurers are on the face of it reneging.

Remember who they are as well, overseas owned multi's who are happy to take our cash.

Hey Chris, am I right that in the US there's a mandatory period, maybe 6 months, in which insurance companies are required by law to resolve claims? It's totally unreasonable that we allow this to drag on forever.

Hi Rumpole,
Chris is looking into this, the Ozzies passed a time limitations law after the Queensland floods and we have heard there was a similar move after the floods in New Orleans.
NBR Publisher

With most properties visited and surveyed there is absolutely no excuse why a settlement period from now of 6 months could not be mandated, Add an appeal period of 2 months then surely progress could be made

Thx Todd & Ionis, all good, and it's a crock that the current system (both National's 'same old' and Labour's 'solution') just pushes disputes into the court system.

Even as a lawyer and specialist former litigation manager, the last thing you'd do is anything guaranteed to add yet more delay, cost and stress!

The only redeeming feature of the courts in this situation is certainty, but that could be done with a practical, pragmatic ombudsman type process instead.

And at an operational level, have the expected, including simple, fair procedures and very fast decision making. But also get smarter, and design the system to do itself out of a job (I did this once, it was very rewarding, well, not financially at a personal level, but that's the point, why siphon cash to all the lawyers anyway?)

In this situation, we could operationalize the 'do itself out of a job' concept as quickly as possible for example by translating every decision in real time into a set of clear principles as well. We don't want the old style 'cases' building 'precedents' that lawyers have to wade through every single case at enormous cost to find what they mean. What you want here is a set of principles, informed and refined in real time. Every decision immediately helps build and refine the set of principles defining how the 'ombudsman' will reach his/her decision.

The clarity would be immediate and transparent to everyone, including insurers, and if done well, the case load of residual disputes should just fall off a cliff as even those people and insurers with disputes get the clarity they need to resolve them right away themselves.