Proposed changes to EQC broadly supported

6 July 2015

Proposed changes to EQC broadly supported

Changes proposed for the EQC respond to lessons from the Canterbury earthquakes and are broadly supported by the Insurance Council of New Zealand, ICNZ Chief Executive Tim Grafton said today.

“The thrust of the proposals make sense for customers, and preserves New Zealand’s uniquely high level of insurance protection from the likes of earthquakes, volcanoes, tsunamis and landslips. It paves the way for a more efficient and effective response to major disasters in future,” Mr Grafton said.

At present, EQC and private insurers share claims-handling responsibilities, depending on the type and value of the claim.

“It makes sense that the first contact people make when an earthquake strikes is with their insurer and not EQC, so, requiring by law lodgement of all claims with insurers is a sensible change. Many people will go for years having no direct relationship with EQC at all, but they do know their insurer,” he said.

“We also believe insurers should be handling all claims, some of them on behalf of EQC which had only about 24 staff when the first Canterbury earthquake struck. That required them to scale up to about 1800 staff to manage the claims that poured in.”

“Claims handling is a core daily function of private insurers and they employ thousands of staff who are on hand to respond 24/7 and handle over a million claims a year. So, it makes sense for them to not only accept lodgement of claims but where they are willing and able, to be responsible for handling them too.”

“The Government says it wants certain pre-conditions to be met before that happens. We meet several of those already and look forward to working with EQC so we can transition to a response that works best for customers dealing solely with their insurers for damage to their homes,” he said.

“We agree with the proposal for insurers to pick up all contents damage – again it simplifies claims for people” he said.

The level of the EQC cap and several technical issues need to be looked at in detail. ICNZ has established an expert working group to go through the detail of the discussion document which it will submit on in due course.

ENDS

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