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Friday, July 15, 2011

Some questions for insurance companies

As a residents' group we have tried to assess the issues we face with our respective insurance companies, and what might arise as we go through either the repair or rebuild process. Looking at the experiences of others, especially in Kaiapoi, it is clear that we cannot expect the process to be easy.

To canvas the likely issues there has been an e-mail survey and an ongoing exchange of views. The following list of questions and issues covers most of what has arisen. The list has been sent to those who might be able to work with insurance companies to produce answers, and is blogged here just in case it can help other groups or individuals. It is not a complete list but enough to get started with.

Those going down the EQC and Fletchers/EQR may also find some of the questions useful.

The list is lengthy so only the first part is visible. Click on the link at the end of the text below to read the rest. As usual: please let me know of any errors, omissions or confusion.

Some Questions for Insurance Companies

Note: XYZ is used as a generic acronym for insurance companies in general. PMO stands as a generic term for each insurance company's project manager.

1 Assessments
  • Assessments in the Red Zone have become a matter of utmost importance for both parties. Will XYZ allow full participation of the home-owners in the assessment?
  • If a house has already been deemed uneconomic to repair will re-assessments be made and, if so, why?
  • Will all issues identified be pointed out, described, and any significance explained, at the time of assessment? If not, when will they be?
  • Will home-owners be permitted to submit their own list of issues, and will this be added to the inspection file and form part of the decision making process?
  • Will XYZ/PMO agree that at the end of the inspection there will be no obligation, or pressure, to sign any agreement, acceptance or consent and that any agreement, acceptance or consent that is signed at the end of the inspection will be subject to a 7 day cooling-off period?
  • Does XYZ agree that where formal acceptance is required,  the process must be governed by the concept of informed consent i.e. home-owners can only be expected to sign a formal acceptance once the contents and ramifications are fully understood?
  • Does XYZ agree to make available a full copy of the assessment, along with any and all associated documents, before XYZ or PMO ask for consent to a project plan, to demolish, or to proceed with any other activity? 
  • Does XYZ agree that time will be allowed for home-owners to seek advice on the content of any agreement, acceptance, consent, or other document to be signed? (this process may include, but not be limited to,  obtaining advice from building specialists, geotechnical engineers, insurance companies, lawyers, mortgage holders.)
  • What process will XYZ provide for questioning or challenging  an assessment, the conclusions drawn from an assessment, or the recommended solution(s)?
  • Where the Repair/Rebuild outcome of an assessment is a matter of comparative cost, will XYZ provide the claimant with details of their costings? If not, why not?
2 Repairs
  • What engineering resources will XYZ use to assess the state of the ground prior to repairs on land that incurred damage? [Note: this is an insurance company responsibility]
  • Will the results of, and the recommendations arising from, these tests be made available to claimants before any agreements are entered into? If not, why not?
3 Rebuilds - in situ
  • What engineering resources will XYZ use to assess the state of the ground prior to rebuilds on land that incurred damage? [Note: this is an insurance company responsibility]
  • Will the results of, and the recommendations arising from, these tests be made available to claimants before any agreements are entered into?
  • Where the entitlement is based on a sum of dollars per square metre (e.g. $1,400 per sq m), will the purchasing power of that sum be:
    • based on the retail price (i.e. the price an individual would pay for a house)
    • leveraged to the full extent that XYZ can use its purchasing power to reduce prices?

      An insurance company could say a particular building has a retail value of $200,000 but negotiate a much sharper price. That way it saves itself from making a full payout. This is why claimants wanting to take the cash don't get the full value, but a lower amount.
4 Rebuilds elsewhere
  • See the 3rd item in the preceding section.
  • Will XYZ be offering or facilitating land and building packages?
  • Most home builders direct their work at the upper end of the market (big and expensive houses). Will XYZ provide assistance with finding designs and builders for the modest end of the market (in the 90 to 150 sq range?)
  • How long will a claimant have to decide where they want to build ?
5 Quality
  • As the insurance claim is between the claimant and XYZ, it is expected that XYZ will warranty the work done on its behalf by contractors and sub-contractors for the claimant.
  • There is a long chain from XYZ as insurer through PMO, contractors, sub-contractors and possibly further. Does XYZ accept responsibility for the quality and longevity of the methods, materials, and workmanship employed at all levels of the chain? If not, why not?
  • Will XYZ require that all persons employed at any of the levels mentioned above have been approved as a fit person for the job? If not, why not?
  • Will XYZ/PMO allow claimants the opportunity to vet the nominated contractor and to disagree if  they feel the contractor is not suitable?  If not, why not?
6 Project planning, timetables, delays and problem resolution for repairs
  • Will XYZ/PMO provide home-owners with a project plan showing the work to be done, the projected start time, duration, milestones and completion date?
  • Will the project plan also provide a list of eligible contractors so a selection can be made on the basis of the home-owners preference for quality and suitability?
  • Will XYZ agree a mutually suitable start time with the home-owners, with no pressure to fit into a wider PMO project schedule?
  • Will XYZ agree that where home-owners are to vacate their property no work will start until accommodation suitable to home-owners needs have been found, and that no pressure will be applied where suitable accommodation proves difficult to find?
  • Will XYZ/PMO provide regular written weekly reports for any projects that will take more than four weeks?
  • Will XYZ/PMO give adequate notice when the project is behind schedule and unlikely to be completed on time?
  • Will XYZ/PMO provide additional (actual and reasonable) accommodation costs when the project falls behind schedule and the initial accommodation monies are exhausted?
  • Will XYZ provide a fast track mechanism for investigating situations where the home-owners, or their agent, consider there has been a deviation from the project plan or that the quality of materials or workmanship are unsatisfactory?
7 Project planning, timetables, delays and problem resolution for rebuilds
  • (as for item 6 above, adjusted accordingly if required)
8 Insurance
  • Will XYZ provide full insurance cover for the property being repaired or rebuilt from the start of the project until the moment of hand over?
  • Will XYZ provide full insurance cover for all repaired and rebuilt properties once they are completed?
9 Buying an existing property
  • If we want to buy an existing property, can we have the same amount of money as if we were to have our house rebuilt?
  • How is the amount of money available to purchase an existing property calculated and why is it calculated this way?
10 Red Zone issues
  • Prior to February 22 (or June 13 as the case may be), emergency work was carried out on properties to enable residents to continue living there. This work was related to one or more of the following: safety, structure, heating, sanitation. When checking with XYZ claimants were told this would be at no eventual cost to them as the amount would be deducted from their accommodation entitlement. Will this be honoured for those in the Red Zone?
  • If a home is considered repairable, and the owners choose to remain in the Red Zone, will XYZ repair the house and subsequently provide full insurance?
11 XYZ 's relationship with claimants
  • Will XYZ work with residents groups, or CanCERN, to agree a code of conduct setting out the needs and expectations of both parties to govern the processing of claims, repairs and rebuilds  once they have been passed along from EQC? (something like a mutual FAQ).
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