Settlement of Earthquake Claims Tops $13 Billion
Settlement of Canterbury Earthquake Insurance Claims Continues Apace, Topping $13 Billion
The settling of Canterbury earthquake private insurance claims continues apace as pay outs hit the $13 billion mark, advancing at $10 million a day in 2014.
The Insurance Council of New Zealand announced today that at the end of September 2014 insurance companies had settled $8 billion in commercial claims and $5 billion in residential Canterbury earthquake claims.
“The $13 billion paid out to date is a significant contribution to the Canterbury economy and also a tangible demonstration that insurers have their foot firmly on the pedal, ensuring the pace of settlements hasn’t dropped off in 2014, even when many complexities still remain,” says Insurance Council Chief Executive Tim Grafton.
“In 2014 alone, insurers have paid out $2.7 billion to settle residential and commercial claims, the equivalent of $10 million a day,” says Mr Grafton.
At the end of September 2014 insurers had settled 72% of all residential over cap claims and out of EQC scope claims, up from 66% at the end of the June 2014 quarter.
In over cap claims, insurers had a further 442 transferred from EQC during the September quarter taking the total number of over cap claims to 23,181 (previously 22,739 at the end of June 2014).
Private insurers have fully settled 12,461 or 54% of all over cap claims, including 2,622 major repairs and rebuilds, up 419 from 2,203 in Q2 2014.
The data confirms 1,069 over cap claims were settled during Q3 2014.
There were 9,839 customers who received cash settlements, including approximately 6,000 red zone settlements, up 650 from the Q2 figure of 9,189.
Of the 10,011 customers who chose insurer-managed rebuilds or repairs, 26% (2,622) are fully completed, 16% (1,618) are currently under construction, 3% (315) in consenting, and 8% (791) under contract. The remaining 4,666 (47%) are in the pricing or design process.
The number of undecided customers has also dropped significantly from 1,218 in Q2 2014 to 580 - almost half of those customers currently have their cases before the courts. Customers who have yet to receive an offer from their insurer now stands at 1,140, down from 1,169 the previous quarter.
“The number of undecided customers has more than halved from the previous quarter as insurers and advisory services have put significant effort into helping customers understand the offers presented to them,” says Mr Grafton.
“Many of the 1,140 customers yet to receive settlement offers are in complex shared properties where assessments are still ongoing,” he says.
Those customers who are yet to receive offers or are undecided, has dropped to 7% of the total over cap claims, down from 10% in the previous quarter
“While many complicated issues still remain such as complex shared properties walls, retaining walls, flood, EQC land compensation settlements and mass land movement, the pace of settlement has not dropped off and insurers are still confident that almost all residential claims with be settled by the end of 2016,” says Mr Grafton.
Insurers have settled 78% (50,428) out of scope claims, up from 72% in Q2 2014.