National is welcoming the announcement of reforms to the EQC Act but is calling on the release of information around one that could be prohibitively expensive National’s EQC spokesperson Stuart Smith says.
“EQC cover is unique to anywhere else in the world and works very well.
“The reforms announced by Megan Woods today are largely a result of the review of the Act announced by the National Government last year.
“I am pleased that the Government has picked up most of the recommendations particularly raising the cap from $100,000 to $150, 000.
“However, extending the claim period from three months to two years will prove incredibly expensive and problematic.
“In a big event, it will confuse arguments of apportionment between reinsurers so the Minister needs to answer how different events are defined within that two year period.
“Following the February 2011 earthquake in Christchurch for example, there were literally thousands of aftershocks, many of which were considered separate events.
“This announcement will likely cause significant increases in costs to policyholders - I’d like to know from the Minister what advice she has had from Treasury about how much this will be - and whether Treasury supports the extension of the claims period.
“I am calling on the Minister to release Treasury’s advice on this matter,” Mr Smith says.
A Members Bill to introduce a legal timeline for insurance companies to assess and present a settlement offer to claimants has been lodged by Kaikoura MP Stuart Smith.
“We’ve just received the recommendations from the review into improving the emergency response to large-scale natural disasters, but we also need to look at how we can make life a little easier for people who are dealing with longer term effects like the loss of their home,” Mr Smith says.
“I’ve heard from too many people affected by the Kaikoura and Christchurch earthquakes that dealing with insurance was more stressful than the earthquake itself. That’s why I’ve lodged the Insurance (Prompt Settlement of Claims for Uninhabitable Residential Property) Bill to provide a timeline for when insurance companies must act by.
“My Bill will require an insurer to make a decision about a claim and notify claimants within six months of receiving the claim. This will speed up the process and give claimants greater clarity about when they can expect a resolution, which will help ease the stress during difficult times.
“While people are required to have their insurance premiums up to date, there is currently no time requirement for insurers to assess claims and make an offer. There must be a clearer understanding of obligations both for the insured and the insurer as to the time it will take for an offer to be made.
“In extreme circumstances, the Minister will have discretion to grant an extension to the six month deadline.
“In a country prone to natural disasters, it’s important after events like the Kaikoura and Christchurch earthquakes that we work to identify lessons and make changes to better our response for future events.
“Putting into law a deadline for insurance companies to make an offer to claimants will be a positive step forward. I look forward to this Bill being drawn from the ballot.”