Toka Tū Ake EQC has issued a response following criticism from the New Zealand National Party that claims assessments have been at a snail’s pace and that the government needs to move much faster.
In an earlier statement, National’s Chris Penk said the Labour government should do “whatever it takes” to expedite the process.
Penk, the party’s spokesperson for Cyclone Recovery, noted: “Data from EQC Minister Dr Deborah Russell shows that of the nearly 3,000 claims received since February 2023, only 249 have been completed.
“This means that more than 90% of claims are still sitting somewhere in the system, leaving thousands living in limbo. At the rate that EQC claims are being completed, with just 15 claims resolved per week, it will take over three years for the backlog to be cleared.”
The MP for Kaipara Ki Mahurangi also cited the number – only two, according to Penk – of geotechnical firms tasked to conduct geotechnical assessments for the New Zealand Crown entity and indicated that it’s not enough.
“Labour must show urgency now,” he said.
In response to Penk’s pronouncements, Toka Tū Ake EQC claims head Bernadette McDougall (pictured) told Insurance Business: “Our thoughts are with all homeowners affected by the severe weather events in 2022 and 2023, and we empathise with the uncertainty that they are navigating.
“In the last two years New Zealand has seen weather events that are quite unlike any other events we have seen in the 75-year history of the EQC scheme. Previously around 75% of claims to the scheme were for damage to residential buildings (e.g., by earthquakes). In the last 12 months we have seen those proportions reverse, with 75% of recent claims being for land.”
According to McDougall, claims for damage to residential land often take longer to settle than building claims because damage cannot be assessed until the land has settled and stopped moving.
“Properties can also have the additional complexity of a red or yellow placard applied during a risk assessment by the council,” she said. “This action is independent of insurance and can delay assessment due to health and safety concerns.”
McDougall also provided a detailed response to the issue surrounding geotechnical resources.
“New Zealand has strong geotechnical engineering firms, and their services have been in high demand over the last year,” the claims head told Insurance Business. “Toka Tū Ake EQC has recently provided onsite training and support to four geotechnical engineering firms, assisting the industry to have more capacity for delivering EQCover assessments alongside two established firms with considerable EQCover land claim experience. All of these firms are being used.
“Private insurers manage all aspects of residential insurance for homeowners affected by severe weather, including the EQCover part on behalf of Toka Tū Ake EQC. This partnership gives homeowners a single point of contact at every stage of their insurance claim.”
The assessment process, however, won’t be complete without liaising with geotech experts.
“Every situation is unique, and we know insurers are working hard to progress EQCover claims lodged with them,” McDougall said. “It’s difficult to provide an overall EQCover assessment timeline given the different demands across all of the regions affected by the anniversary weekend floods and Cyclone Gabrielle, and the time it takes for land to settle.
“But we consider current timeframes are to be expected considering the scale of the damage, the number of claims, and the demand on qualified assessors and specialists. For example, geotechnical engineers are also required for wider recovery work (e.g., council assessments, roading, assessing/reinstating flood protection).”
Additional geotechnical resources have also been brought in by insurers to support their EQCover site assessments for multiple events since August 2022, according to McDougall.
“We encourage homeowners to stay in touch with their insurer to understand their individual timeframe,” she said.
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