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A war of words has erupted between Insurance Council of New Zealand (ICNZ) CEO Tim Grafton and a law firm associate.
John Goddard of Morrison Kent suggested in an opinion piece published this week that the new arrangement between insurers and the Earthquake Commission (EQC) for dealing with Kaikoura earthquake claims could actually result in more litigation.
He accused insurers of causing a raft of failures including:
providing little certainty for businesses and homeowners
lacking in community engagement
making it up as they go along
uncertainty around complaints procedures
Goddard also said such problems could have been avoided if the memorandum of understanding that insurers and EQC put together to ease the claims influx had gone through a public process.
However, Grafton hit back with a swift response describing Goddard’s piece as ‘poor form’ since it was ‘generating uncertainty for those going through a crisis in their lives’.
“John Goddard… is employed in dispute resolution,” Grafton fired back. “No surprise then that his opinion piece ‘New level of uncertainty for homeowners’ might suggest the need for his services.
“Goddard says all this uncertainty could lead to litigation being the only recourse left to settle disputes. Rubbish,” Grafton went on.
“The IFSO and FSCL provide free dispute resolution services (so no need to lawyer up at your cost) and their decisions are binding on the insurer but not on the insured.”
Grafton went through each of Goddard’s critiques point by point.
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Regarding the uncertainty over process Grafton said insurers had received training from EQC on the Act but due to there being 30-40,000 claims lodged it was impossible to tell each person exactly when they would be settled or their damage assessed.
“Insurers are prioritising the vulnerable and are working around the clock to help their customers,” he said.
“What we can say with certainty is that the lessons from Canterbury have been learned and a more streamlined and efficient claims process will apply.”
He dismissed Goddard’s assertion that the community had not been engaged saying insurers and EQC had been ‘on the ground from day one.’
“To suggest there should have been community consultation on whether insurers and EQC should have worked together shows no understanding of the conditions on the ground post-catastrophe.
“People are in a state of shock prioritising basic life needs and in no space to be consulted on claims management where they have little or no expertise. Our response was based on lessons learned,” Grafton said.
He also asserted that the duty of good faith and standards set out in the Fair Insurance Code stood just as strong whether insurers were dealing with their customers or as an agent of EQC and clarified that complaints would be managed through the insurers and their external dispute schemes following a process developed in conjunction with the Ombudsman, the Privacy Commissioner, IFSO and FSCL.
Goddard had also questioned how the success of the new approach would be measured.
Grafton said that could only be answered ultimately in time.
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