Slow insurance action heads raft of earthquake issues

Slow insurance action heads raft of earthquake issues – 21 December

Insurance issues are topping the list of concerns from manufacturers after the Canterbury earthquakes say the New Zealand Manufacturers and Exporters Association (NZMEA). The City Plan, electricity line charges and the impact of the earthquake on the labour market were other key concerns raised at a meeting last week.

NZMEA Chief Executive John Walley says, “There is hardly a company I talk to that doesn’t have a complaint regarding their insurance company. The sentiment is becoming litigious as loss adjusters try to weasel their way out of business interruption claims The insurance companies were happy to sell cover but seem equally happy to avoid paying out.”

“It is all coming to a head as the delay has seen the business interruption indemnity period from September 2010 used up for most firms and more to follow from the February 2011 event. There is a feeling that it is the insurance companies’ studied tardiness is holding back the recovery.”

“Escalation in the costs of repairing factories, expected to be minor at first assessment, are not helping.”

“The potential for 20 percent rises in electricity line charges have also been reported.”

“There are also concerns about rebuilding plans. Zoning changes in the City Plan, which create new residential areas that were previously industrial, could prevent manufacturing firms from gaining consents for new activities not covered by existing use provisions,” says Mr Walley.

“Nit picking by planners is a problem and the inappropriate Council pay rises have not been matched by their performance. The grim reality of our times does not seem to diminish the ‘stick it on the rates’ entitlement mentality.”

“In addition, there are concerns that the impact of the construction effort on the labour market could crowd out existing firms, artificially raising wages and threatening long-term jobs.”

“There are a number of issues for local authorities and central government to work through. The recovery road blocks must be removed; it is clear from comments we have received that further delays in 2012 won’t be easily tolerated.”

ENDS

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