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Largest insurer supports move to review EQC

Largest insurer supports move to review EQC

The country’s largest general insurer, IAG New Zealand (IAG NZ), today welcomed the Government’s announcement to review the Earthquake Commission’s scheme following this year’s flooding in the North Island.

IAG, which trades under the State and NZI insurance brands, said its own research indicated at least 15-20% of New Zealanders did not insure.

Insurance Council President and IAG NZ Chief Executive David Smith said feedback from assessors and loss adjusters suggested the problem was widespread in some NZ communities. “You’re probably looking at up to 30 or 40% without cover in some rural areas. This becomes a real problem when entire regions are hit as we’ve seen recently. It makes it very difficult to get the community back on its feet,” Mr Smith said.

Mr Smith said the research also indicated the main reason for not having insurance was that people felt they couldn’t afford it. “The challenge for insurers, Government and local government is to work together to help develop a solution for New Zealanders that’s fair and equitable,” said Mr Smith.

“Obviously community relief funds, while a natural response at the time, are not sustainable in the long term and only serve to punish those with cover by effectively taxing them twice,” he said.

Mr Smith suggested one solution might be for insurers to consider a low cost “no frills” product. However, the industry would need the Government’s help. “The levies we collect, such as those that fund the Fire Service, make it difficult to offer a cheaper product. I’m sure this is something that will be considered in the review so that’s great.”

Mr Smith said flooding remained the most significant cause of claims disasters in New Zealand attributing for more than 65% of all weather related claims. “Unfortunately, this situation is only likely to be exacerbated further by global warming and climate change,” he said.

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