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A group of approximately 6,358 EQC and private insurer claimants are struggling to secure payouts and rebuild and repair work
The representative group – Prisoners in the Tower – says that the claimants fall into three distinct groups: those who have suffered serious foundation damage but have been kept under the Earthquake Commission (EQC)’s $100,000 cap; those pressured into signing agreements allowing the insurer to stall and delay; and those who have filed against the insurer in the High Court.
Tower has approximately 40 cases currently before the High Court, and an unspecified number of other outstanding earthquake claims. The representative group claims that the Government, which owns 7.5% of Tower’s shares through the Accident Compensation Corporation (ACC), also has a large measure of responsibility for the ‘endless delays and obstacles’ to settling earthquake claims in Canterbury.
“We have a total of 1,150 cases on the earthquake list which are going through the High Court,” Prisoners in the Tower spokesperson Séamus O’Cromtha told Insurance Business. “A number of people are still with EQC even though they’re anticipating over $100,000 in damages, but a lot of them simply don’t have the money to afford a lawyer. The average waiting time last year was 18 months between filing a case and actually getting to a hearing, and there are all sorts of obstacles and delays throughout the process.”
O’Cromtha says the various hurdles include insurers insisting on numerous follow-up surveys, site visits and expert reports, as well as refusing to accept reports from experts on the other side. This results in processes being delayed for years, with only 24 cases having been followed all the way through to judgement thus far.
“It’s been 2,645 days since the trigger event, which was in February 2011,” O’Cromtha continues. “Most of these claimants haven’t had a cent from their insurance company over that time – presumably the insurers have been sitting on reinsurance payments and earning interest on those while grinding down on payouts in the process, and if that’s not acting in bad faith and against all the principles of insurance, then I don’t know what is.”
In the wake of failed repairs and increased litigation against the EQC, O’Cromtha says resources are likely to be stretched even further.
“The Government is denying responsibility and deflecting it on to construction companies, subcontractors and other parties instead of fronting up,” he continues. “Many people – including the vulnerable and the elderly – have signed declarations which have essentially removed their right to sue, and the insurer has continued to delay and delay without doing any repairs or rebuilds. It’s an ongoing disaster for a lot of people.”
