Over $10 Billion Paid By Insurers for Canterbury Earthquake
12 February 2014
Over $10 Billion Paid Out By Insurers for Canterbury Earthquake Recovery
Insurers involved in the Canterbury earthquake recovery effort have paid out over $10 billion in commercial and residential settlements, according to the Insurance Council of New Zealand.
At the end of 2013, $6.7 billion dollar had been paid out for commercial settlements and $3.5 billion in residential settlements.
“Of the $6.7 billion of commercial claims paid out, $2 billion was in 2013 alone and that doesn’t include recent settlements such as the largest insurance pay out in New Zealand’s history to the Ports of Lyttelton of $428 million,” says Insurance Council Chief Executive Tim Grafton.
The Ports of Lyttelton pay out will occur in the first quarter of 2014.
“That means 70% of all commercial claims have now been settled and reinforces the value of insurance in helping the commercial sector to quickly recover from what was one of the biggest-ever insurance disaster events globally,” says Mr Grafton.
“The commercial pay outs also includes $1 billion in business interruption insurance, money that helped Canterbury to get back on their feet quickly following the earthquakes,” he says.
In 2013 more than $1.56 billion was paid out in settling and completing Canterbury earthquake residential claims.
“That’s over $4 million a day being paid out to settle residential claims, taking the total residential payments for repairs, rebuilds and cash settlements to date to over $3.5 billion,” says Mr Grafton.
Based on data collected by CERA to 31 December 2013, 54% of all Over Cap and Out of Scope claims with insurers and government-owned claims management company Southern Response were settled and completed, that’s includes 58% of all Out of Scope and 42% of all Over Cap claims.
Out of Scope claims are those outside the scope of EQC which includes driveways, pathways and swimming pools. Over Cap claims are those above the $100,000 plus GST cap for EQC.
The CERA data shows that insurers have 64,925 Out of Scope claims of which 37,932 have been settled and completed. Insurers have 21,962 Over Cap dwelling claims of which 9,119 have been fully settled and completed.
There is a further 9,759 Over Cap dwelling claims in the pipeline, taking the total settled and completed and in progress (after agreement with the insured) to 86% of all Over Cap residential claims.
“Last year we also started to see completed insurer-managed rebuilds and repairs that began in 2012 come through the other end of the pipeline, with 725 rebuilds and 769 repairs completed by the end of 2013,” says Mr Grafton.
“These were insurer-managed rebuilds and repairs that could only have started late in 2012 because of ongoing seismic activity, the release of building guidelines and ongoing EQC apportionment work,” he says.
Builders are reporting that over 6,000 residential properties were built in 2013 and will increase to 7,000 in 2014, much of that will be from insurance monies released through cash settlements.
“Also consenting forecasts from the Christchurch City Council indicates that 2014 and 2015 will be a big year for the completion of insurer-managed residential rebuilds and repairs,” says Mr Grafton.