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Tuesday, January 4, 2011

Claims management for the Canterbury Earthquake (Detailed)

The material below has been lifted directly from information developed in response to a list of questions from the CCC. It was provided by NZ Earthquake Commission and was correct as at the 24th of Dec 2010. A copy of the full response can be downloaded from here.  

The paragraphs are not numbered in the original but have been here so particular items can be highlighted.

The material details the processes involved in making assessments, and what type of activities may take place. It seems different from what some have encountered and may reflect changes made in light of experience gained in the early assessment period.

Para 5. is key to the issue we have discussed of "what happens if we don't agree with the EQC assessment?".  Mention is also made of the EQC complaints procedure so, presumably, it is another avenue for challenging aspects of an assessment. Not mentioned in the paragraph is that, in some circumstances, EQC will refund the cost of an independent expert assessment.

Para 6. mentions that settlement cheques will be sent some time after an assessment is agreed. Some experiences to date have been that the cheque has arrived in advance of notice regarding the settlement.

If any of this information is important please refer to the original document and check to see if there have been any updates.

Start:

1.  Some assessments are fairly straight-forward and will require one site visit or, in cases of minor damage, a phone call and/or the filling out of a form.

2.  In the case of all but minor building damage and most contents claims, a loss adjuster and an estimator will spend some time at the home looking at every room, at roof spaces, roofs, walls, outbuildings and so forth. Once this has been done, they will provide a damage assessment, and ask the owner to sign a Statement of Claim (SOC). A SOC is a list of the damage.

3.  At the same time the assessors will take notes for a Scope of Works (SOW). The cost of repairs will be based on this document. In some cases the assessment of damage and the estimate of costs can be done at the end of the visit and the owner is given a letter about this at the time. If not, the letter will be sent once the work has been concluded.

4.  Once the loss adjuster and the estimator have visited, and, given agreement from the owner, the claim will be transferred to the EQC payment system.

5.  In some cases, it may take more than one visit by a loss adjustor and an estimator and perhaps an engineer and a valuer as well. Sometimes the owners will not agree with an assessment and EQC will usually look at the matter again. Owners are free to call in their own experts and EQC will look at the reports provided. EQC has a complaints and disputes resolution processes in place to address owners’ concerns.

6.  Once an assessment is agreed, what happens next with the payment depends on the nature and value of the damage:
  • for all claims under $10,000 (except for structural and/or chimney damage) and all contents claims up to EQC's limit of $20,000 plus GST, owners will be sent a cheque and some documentation including a copy of your SOC
  • building claims of approximately $10,000 to $100,000 + GST range are being referred to our project manager, Fletcher Construction, and EQC will pay them once the repairs are carried out
  • where a building claim is estimated as in excess of the maximum allowed to be paid by EQC i.e. $100,000 + GST, then what happens to the payment depends on whether the owner has a mortgage. Those with a mortgage will have their money paid to their mortgagee. Those without a mortgage will have the $100,000 paid directly to them
  • if the money is paid to the mortgagee, then what happens with the money will depend on individual circumstances. The main banks have said that typically they expect to use the money to repay lending and then work with customers in relation to any new lending and repair and rebuilding activity.
7.  Once owners have been advised that a settlement cheque will be sent, this could take at least two weeks and sometimes longer simply because of the volume of payments that need to be made.


End

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