New Zealand insurers and the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) have welcomed the next step in disaster recovery following the two extreme weather events earlier this year: the Auckland Anniversary weekend floods and Cyclone Gabrielle.
However, ICNZ acknowledged that while this next step will provide certainty for many customers, some will not have all the information that they need to make decisions on their next steps.
“Regardless of the category your local Council has determined your property falls into, your insurance company will continue to work with you as normal on your insurance claim. Your contractual rights under your insurance claim are between you and your insurer. They are unaffected by the category your property has been placed into,” ICNZ chief Tim Grafton said in a news release.
Grafton also stressed that individual insurance policies will pay out for the physical damage for affected houses up to each level of sum insured or any policy limits, as well as benefits that may apply. To date, the two combined events have resulted in more than 100,000 claims worth $2.8 billion.
Grafton outlined a list of what to expect for homes listed under the three categories that cyclone minister Grant Robertson announced a few weeks ago.
“For those customers that have been notified their property is in a Category One area, meaning councils won’t require additional work beyond returning things to how they were before, this will provide the certainty to proceed with their recovery,” Grafton said.
For those in Category Two areas, additional work is required to reduce risks at either a property or community level, Grafton said. He also said that individual insurers will continue to settle claims as policies provide coverage for physical damage incurred. However, he explained that there is some merit to waiting until the conclusion of the local council’s process before undertaking property repairs.
“For those properties in Category Three areas, where it is deemed there is an unacceptable risk of future flooding and it may no longer be safe for people to live there, again your claim will continue as your policy benefits provide for coverage for physical damage, up to any policy limits,” Grafton said. “Your insurer will cash settle your policy so that you can make decisions on your next steps. The details of what will happen to your claim in the event of any property buyout are still being worked through.”
Decisions for communities affected by the recent weather events are much bigger than insurance and property damage, Grafton said. He also expressed the ICNZ’s support for councils taking a long-term view and addressing the need to keep Kiwis out of harm’s way.
“We know from previous disasters that for those worst affected this is often a very stressful and uncertain time,” he said. “Even when there is a clear process in place there is a lot to work through. This can take time and care is needed to reach the best outcome available. For many, today’s announcements are just the start and we are all waiting for more detail, both on specific measures required by councils as well as any additional council help that may become available to either make repairs or to move on. Insurers will support their customers through this and meet their claims in line with their policies.”
What are your thoughts on this story? Please feel free to share your comments below.
