Insurers Release Westport Flood Progress Data

The Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) today released claims progress data on Westport’s July 2021 floods. They show 85% of home claims were fully settled or near completion. Around 85% of home contents claims, and 97% of motor claims, were fully settled.

The community and contractors have faced many challenges in the recovery including a shortage of temporary accommodation, a nationwide shortage of building materials, pandemic lockdowns and multiple weather events that have been retraumatising to many.

"Insurance is there to help put things right after a major event such as this and it has been rewarding for insurers to work with the community to do so," said ICNZ Chief Executive, Tim Grafton.

When the July floods first hit, homeowners that were displaced had access to a temporary accommodation allowance. While each policy is different, on average such benefits contribute around $20,000 towards accommodation while the uninhabitable home is repaired. Because of the shortage of accommodation, insurers were flexible in how residents used their allowance. In negotiation with their insurer some residents chose to pay a daily allowance to friends and family, some rented or purchased mobile homes, and some found rentals.

As of end of January, for Westport home insurance claims, around 65% were fully settled, a further 20% had their repairs underway and are near completion. Of the remainder, 5% had had the scope approved by the homeowner with work scheduled to start, another 5% were awaiting the homeowner’s decision and the final 5% were in resolution with the insurer. It is estimated the cost of the damage to Westport homes from the July 2021 flood event for these claims will be $55.6m.

Tim says: "insurers have been securing available contractor resources from around the South Island for customers to complete the recovery as quickly as possible. Given the circumstances, we are pleased with the progress being made in Westport and expect the remaining homes will be completed over the coming months."

Progress on home contents claims has closely followed home settlements with around 85% of claims fully settled and $13.5m paid to date. As is typical, many Westport residents have held off on the finalisation of their contents claims until they have a home to move back into thus avoiding storage costs of new whiteware and soft furnishings.

Car claims are largely finalised for Westport with around 97% of claims fully settled with $1.74m paid at the end of January.

About half of homeowners have chosen a cash settlement so they could choose their own contractors and approach to repairs. Many homeowners will be going at their own pace with some choosing to do additional resilience work at the same time. These sorts of decisions often require consents or design work which is outside the scope of the insurance settlement which only covers costs for the flood damage from the event.

The remaining customers will have chosen their own contractor, financially supported by their insurance company. When managing the order of repairs on behalf of customers, insurers prioritised the most vulnerable within the community, who had suffered the most severe damage.

Our understanding that climate change is making extreme weather events both more frequent and severe has broad implications. Insurance continues to support the residents of Westport and we encourage people to shop around.

"Insurance only transfers risk and individual householders can’t be expected to build their own flood defences. Community led action involving local and central government is needed to reduce flood risk and make infrastructure more resilient. This is the only long-term solution to reduce further economic, social and environmental disruption as we look to a future where extreme weather events are already becoming both more frequent and severe. We as insurers look forward to working with communities to do so."

© Scoop Media