Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Plea for EQC rethink as insurers withdraw from market

Plea for Earthquake Commission rethink as insurers withdraw from market

Charlie Dreaver, Reporter

A consumer watchdog wants the government to rethink the Earthquake Commission (EQC) as more people are pushed out of getting property and contents insurance.

People on the Wellington shopping street of Lambton Quay. Photo: RNZ / Rebekah Parsons-King

IAG, the parent company for AMI and State, changed its policy Monday last week and will no longer take on new customers in the Wellington area.

Companies such as ASB, which has IAG as an underwriter, would also be affected.

ASB said in a statement that in the wake of the damage done by the Kaikōura earthquake, Wellington remained a high risk area for home and contents cover.

"This has resulted in a conservative approach in Wellington for new business", the statement said. "ASB, in conjunction with its General Insurance provider IAG, assesses each application on a case-by-case basis."

Consumer NZ head of research Jessica Wilson said the watchdog's most recent survey showed most companies were clamping down.



"We're seeing insurers either not willing to provide new policies in particular areas or increasing premiums to the point where they're going to be unaffordable for many consumers.

"So that's effectively the insurer signalling it's not willing to provide coverage for the person," she said.

"Our big concern is if that trend continues, if private insurers withdraw from the market ... and if cover becomes too expensive consumers will be left high and dry" - Consumer NZ head of research Jessica Wilson duration 5:19
from Morning Report

Click a link to play audio (or right-click to download) in either
MP3 format or in OGG format.

Ms Wilson said there were insurers still willing to provide cover, but IAG was a big player.

"It's a significant insurer in our market, so if it's signalling in certain areas, such as Wellington, that it's withdrawing, that really reduces competition and that's bad because overall it's going to help push up premiums," she said.

Last year it was reported that Tower Insurance had increased a Karori woman's insurance by 300 percent, when it decided to change more for insuring properties in earthquake-prone areas.

Ms Wilson said if people had no private insurance they would not get access to EQC earthquake cover.

"The only exception at the moment where you can get cover direct from EQC is if you've been refused cover in the private market. You have to supply evidence of that, few people have that at the moment."

She said it was time for the government to take a broad look at the role of EQC and its ability to provide cover for natural disasters and whether it needs to be expanded.

"The commission was set up to protect New Zealanders from the economic impact of a natural disaster. Private insurers have been helping to play that role, but what we're seeing now is some insurers withdrawing from the market."

Prime Minister Jacinda Ardern told Morning Report it was important New Zealanders were able to get insurance cover.

She said she had not been directly briefed on the issue and would be following up with the relevant minister.

Kris Faafoi, the minister of Commerce and Consumer Affairs, said he would ask IAG why they had decided not to offer new contents insurance policies.

The sector needed to be better at informing customers about changes, that included premiums going up, or coverage being decreased, he said.

He said the situation was a far from being in a position of needing government intervention.

Minister of Finance Grant Robertson said New Zealanders needed to be able to get insurance, and he had spoken to the minister responsible for the EQC this morning.

Speaking as the MP of Wellington Central, he said he was aware of people struggling to get insurance.

He said people living in the capital could get cover from other insurances companies, that weren't owned by IAG.

"We need to make sure that consumers are able to access the insurance market - Prime Minister Jacinda Ardern duration 8:24
from Morning Report

Click a link to play audio (or right-click to download) in either
MP3 format or in OGG format.

© Scoop Media

 
 
 
Top Scoops Headlines

 

News Deserts: The Death March Of Local Journalism

Joseph Cederwall: The corporate media sector seems unable to do anything to halt the raging dumpster fire of consolidation, layoffs and centralisation of content production. All this means we are increasingly seeing ‘news deserts’ appearing in local communities. Illustration by Paul Sahre. More>>

ALSO:

Joseph Cederwall: Journalism Has A Problem - It’s Called Capitalism!

To the extent that solutions exist, they must be solutions that allow journalism to move outside of the broken system that has caused this situation. For this reason, a resurgence in more engaged and community focused local journalism offers hope for a way out of this situation. More>>

ALSO:

Gordon Campbell: On Why Justin Trudeau's Fate Matters To NZ

The scandal now engulfing Justin Trudeau and his Liberal Party is the kind of train wreck that confirms the public's worst feelings about politicians and their back-room dealings. More>>

Joseph Cederwall: Venezuela; Oil, Neoliberalism And White Supremacy

Venezuela has been suffering a slow-burn, yet devastating internal insurgency and economic war since the optimistic beginnings of the ‘Bolivarian’ socialist revolution in 1998. More>>

ALSO:

Ramzy Baroud: What Price Netanyahu’s Victory

It is quite typical for Israeli politicians to carry out confrontational measures against Palestinians shortly before general elections are due. The nature of these measures is determined by the kind of political constituency that Israeli leaders aim to appease. More>>

 
 
 
 
 
 
 
 
  • PublicAddress
  • Pundit
  • Kiwiblog