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Friday, March 22, 2013

Red Zone Extension ministerial paper has been released.

CERA have released the ministerial paper authorising extension of the Red Zone deadline for most areas to 31 July 2013. It is on their Cabinet papers webpage here (towards the bottom, just above the Port Hills zoning information).

There is some interesting stuff in the paper, and a lot that has been withheld, particularly relating to vulnerable people and how this category is defined by CERA.  Of particular interest is the fact Minister Brownlee ignored a significant part of the recommendations.

The paper recommended that there be case by case assessments aimed at those who are vulnerable, and those who were facing extraordinary delays because of exceptional circumstances (paras 4 & 5 in the Executive Summary).  These issues were put to CERA on numerous occasions by the communities involved and clearly they were listening.

For whatever reason this didn’t receive ministerial approval. Instead a blanket extension was given, allowing everyone more time. For many this was an extremely good thing because, as stated in para 8.6 of the Recommendations, CERA estimated that of the 1,000 of the property owners still in the Red Zones less than half would have received any extension at all (i.e. more than 500 would still be faced with exiting by 30 April).

One key element missing in the the paper’s background and commentary material is a realistic appreciation of the relationship between deadlines and insurer behaviour. Somehow there appears to be a silent and unrealistic assumption that more time will enable policy holders and insurers to reach agreement. Deadlines are just winning posts for insurers, a point in time to which they need to deny, delay, procrastinate and bully, after which the government will “sort” the problem for them.

Until the government pushes insurers into decisive action, and allows dispute or legal processes to work themselves out, there will be no timely equitable settlement of claims.

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