An enhanced experience for customers
13 November 2018
An enhanced experience for customers through the Kaikōura earthquake response
The new partnership established between the Earthquake Commission and insurers for settling claims for the November 14 Kaikōura earthquake has resulted in quick settlements and an enhanced customer experience.
Chief Executive Sid Miller says that with the second anniversary of the Kaikoura event upon us, it is an opportunity to reflect on how the insurance industry has performed in response to the disaster.
“It is really pleasing to see our customers have been happy with the service provided, with a 70 per cent customer satisfaction rating across all Kaikōura claims.”
“EQC and the Insurance Council of New Zealand (ICNZ) agreed on a partnership arrangement just a few weeks after the November 14 quake, the second largest in New Zealand insurance history. Under the agreement, private insurers acted as EQC’s agents and received, assessed and cash settled home and contents claims from their own customers, even if the claims were under the EQC cap.
“This meant in many cases that customers only needed one contact point, with their insurer, who would manage their claim from beginning to end. Customers benefitted from many efficiencies resulting from the removal of duplicated steps in the claim process and the collective use of insurance sector resources, such as engineers and assessors,” says Mr Miller.
Tim Grafton, ICNZ Chief Executive, said insurers welcomed the opportunity to work collaboratively for the benefit of their customers and were quick to agree to the partnership model.
“We’re proud of the progress both insurers and EQC have made to settle such a huge volume of claims for customers in two years,” said Mr Grafton.
“99.8 per cent of all domestic claims and 99.2 per cent of total claims (both domestic and non-domestic) resulting from the event have been settled or partly-settled, with a total of $1.43 billion paid out, and insurers are working hard to resolve the remaining outstanding claims for their customers. Kaikōura has shown how insurers and EQC can work together in the aftermath of major events using this model.
Under the partnership model, customers had their EQC claim cash settled. Repairs to their homes were then to be arranged by them or by working with their insurance company.
New settlement process “worked very well for smaller, less complex claims”
Hurunui District Council Mayor, Winton Dalley, said having just one insurer handle claims (instead of a private insurer plus EQC) had worked very well, especially initially with the bulk of straightforward claims.
It also worked well in instances where damage turned out to be more serious than originally thought, and additional things came to light pushing the claim up much higher.
“The flexibility shown by EQC when it had to have another look at a settlement over unforeseen damage was good,” Mr Dalley said.
In his view, the main drawback was with the bigger and more complex claims, putting a huge responsibility on insurance companies to manage those projects with the property owner.
“On the plus side, the insurance companies have had a much better communication with the clients – almost day to day contact – with people they already had a relationship with,” he said.
Hurunui District residents made 2,036 insurance claims after the Kaikōura quake.
Kaikōura claims “a lot more streamlined”
The way in which insurance claims have been handled for the earthquakes in Kaikōura had been a lot more streamlined and efficient since the introduction of the new insurer partnership, said Kaikōura District Council Mayor Winston Gray.
“Home/land owners have only had to deal with their private insurer, as EQC’s agents, which has meant that we have had more people reaching the settlement stage sooner post-quake,” said Mayor Gray.
“This has allowed our residents and ratepayers to get on with repairing and rebuilding relatively quickly.
“Council has helped out ratepayers where we can, to help those living in damaged homes, such as rates remissions for uninhabitable or unsafe buildings, and also with our Winter Warmer programme that aims to help make homes warm, safe, secure and sanitised.
“As we move into a different phase of recovery, we are seeing more progress being made and more consents for building work filtering through to Council. As with any system, there have been delays for some people, and Council continues to work closely with homeowners still going through their insurance settlement process,” said Mayor Gray.
“It is great to see things happening and residents looking forward to the future as the district repairs and rebuilds.”
Kaikōura District residents made 1,650 residential insurance claims after the Kaikōura quake.