Severe Weather Prompts Insurance Warning

With severe flooding of the Maitai in Nelson and flooding in Marlborough, the Insurance & Financial Services Ombudsman (IFSO), Karen Stevens, says now’s the time to get the next steps right.

If damage is caused, Stevens warns against throwing everything away to clear it up quickly.

“Take a breath – although clearing up is only natural, this is a critical time to get it right. Providing it’s safe, take photos or videos of damage and make a list of all things affected. It’s important to establish to your insurer what has been damaged and prove ownership. Your claims process will be easier with those documents to back up your claim.”

Stevens recalls a case where a homeowner made a list of all damaged items that she’d thrown away and sent it to her insurer.

“There is no proof in these cases that the goods even existed or were owned by the claimant.

“The insurer was quite within its rights to say, ‘Unfortunately, you’ve got to give us something more than a list.’ A list of photos of items claimed, and/or receipts, are much more compelling.”

People are expected to do repairs that are necessary to prevent further loss, but they should make non-essential repairs only after talking to their insurer. Insurers can have differing opinions to homeowners on what are essential repairs, for example, pulling up and disposing of the carpet.

“If in doubt – check it out with your insurer. If you have a financial adviser, get in touch with them.”

Stevens says that making a thorough claim early is good practice.

“There’s no such thing as a silly question – if you don’t know what’s covered, go ahead and ask! Check exactly what you need to do to make a claim, then ask them to provide it in writing. It will save you delays in going back to get the information you missed the first time. Provide the right information the first time.

“It’s a good idea to know what type of insurance you’ve signed up to before an event. There’s nothing worse than discovering you’ve signed up for a different type of insurance than you thought. For example, finding out you’re insured for indemnity value, rather than full replacement value (indemnity value means the cost of replacing the goods at the time of damage, i.e., second-hand, not the purchase price), can be upsetting if you thought you had full cover.”

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