Ensuring the insurance industry works as it should when Kiwis need it most is the driver behind Labour’s plans for an Insurance Commissioner, Labour’s EQC spokesperson Clayton Cosgrove says.
“The Canterbury earthquakes have highlighted just how under-prepared both the industry and EQC were to handle a major disaster.
“Being able to call on EQC’s natural disaster fund has certainly lessened the cost of the rebuild for the rest of New Zealand. However the earthquakes also exposed some serious shortfalls, not the least the lengthy and stressful claims process faced by affected residents.
“An independent Insurance Commissioner, funded by a levy on insurers, will take a hands-on role in overseeing the industry and making sure it works better than it has when it is most needed.
“The Commissioner’s first task will be to review and make follow-up recommendations on the actions of EQC and the insurance companies in the wake of the earthquakes.
“Based on what has been learned from Canterbury, Labour will also move to have EQC levies collected through rates rather than through home insurance, with the levy proportional to the value of the home. This fixes the problem of uninsured properties not being eligible for EQC payouts.
“We will also:
- Increase the current $100,000 cap on payouts, as recommended by the Commissioner
- Ensure EQC covers the cost of temporary accommodation for people unable to live in their damaged homes once private cover has expired
- Require EQC to pay for work to protect homes from increased geological risk, such as flooding where land has slumped, following earthquakes
- Work with the industry to develop a plain English insurance ‘template’, able to be varied by mutual agreement of both parties
“The Canterbury earthquakes have highlighted what does - and what doesn’t - work when it comes to the insurance sector. We need to learn from the last three and a half years and be prepared should a similar disaster happen in future,” Clayton Cosgrove said.