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Saturday, 15 January 2011

Mayor Bob Parker's update on the earthquake recovery

Mayor Bob Parker, in an information sheet e-mailed to CCC Recovery eNewsletter subscribers on Friday, provided his update on the earthquake recovery. The topics covered are:
  • Water (the state of the City's infrastructure)
  • The Boxing Day aftershock
  • Regulatory issues (mainly to do with building consents)
  • Cordons
  • Infrastructure rebuild (will be subject of a separate post)
  • 160 Manchester Street
  • Advocacy for Homeowners (will be subject of a separate post)
  • Rates relief (not many people have applied)
  • Impact from Queensland flood
You can download a copy of the current newsletter here and past newsletters can be found here  (at the bottom half of the page).

Friday, 14 January 2011

EQC - Updates

EQC have released two updates associated with recent aftershocks. It is interesting to think the Boxing Day earthquake has resulted in more claims that the Gisborne earthquake of 2007. There is also an update on the flooding in Brisbane and its effect on claims processing.

Update on EQC activity and claims deadlines
If you haven’t made a claim before, or if it is new and separate damage, or if you have had your earlier claim settled, then you will be lodging an entirely new claim. You have three months from 26 December to make a claim.
Claims Update
EQC has now received 6,895 claims from the 4.9 magnitude Boxing Day earthquake, easily surpassing those from the previous two big aftershocks and now representing a sizeable event in its own right.
“To put it into perspective, it exceeds the 6,200 claims we received from the last significant earthquake we covered before Canterbury - the Gisborne event of December 2007,”the chief executive of the Earthquake Commission, Ian Simpson, said today.
Brisbane flooding and claims processing
EQC’s claims management centre in Brisbane had to be evacuated two days ago because of the Queensland floods. This affected our ability to take claims enquiries although the processing of payments was able to continue from remote locations.
As of yesterday, the office had reopened with 65 of the processing staff able to return to the office and another 30 able to work from home. It is expected that all staff will be able to return to the office from Monday.
The office is run by our contractors Gallagher Bassett and was located in Australia to have it away from New Zealand in times of our own disasters. It is ironic that the office has been caught up in a local disaster at the same time we continue processing claims for the Canterbury disaster.
The original news releases from EQC can be found here  and here. The information on the Brisbane office is contained in a newspaper advertisement. The original can be found on the EQC site here.

Accuracy of EQC assessments with the passage of time.

Many people in this area had their assessments done towards the end of October (quite a few were done on the 26th of October, 11 weeks ago). Since then there have been major aftershocks on the 14th of November and the 26th of December, a number of significant other aftershocks (18 shocks of magnitude 4 or greater since Labour Weekend) and the passage of two and a half months since the assessment.

No doubt EQC rely on claimants to report any additional damage resulting from aftershocks, and many of us have done so. Ideally this information would be fed into the unfinished assessment process, adjustments made, and perhaps another visit arranged. Without feedback from EQC there is no way of knowing if this additional information has been applied to the original assessment.

Overlaying all of this is the effect of the amount of time that has elapsed. Since Labour Day there has been the impact of ground settling, weather (heavy rain and strong winds), and gravity pulling on damaged and mis-aligned structures. These effects can be subtle, unnoticed by the inexperienced eye, yet increase the amount of damage, perhaps to the point of adding significantly to the effort and cost of repairs.

There has to be a point where initial on-site assessments become so out of date they cannot be relied upon to produce an accurate final assessment.

Perhaps there should be a "use by" date applied to all assessments so that they must be redone if either of the following occur:
  • more than 6 weeks elapses between the making of the assessment and providing the finalised assessment to the claimant AND a claimant reports finding significant damage additional to that mentioned to, or by, the assessment team
  • there is an aftershock of sufficient magnitude that a claimant reports additional damage
No doubt this will cause additional work for EQC. The alternative, leaving matters the way they are, will be for claimants to be faced with an assessment based on potentially inadequate information and unsure whether they have received a fair and accurate assessment. This in turn may also cause a conflict of costings with insurers who may have made their own assessments at a different time.

Perhaps those of us who have had a visit, but are yet to receive a finalised assessment, should get together and look at whether we want to take a unified approach to this. Let me know.

Thursday, 13 January 2011

Vero insurance and Mainzeal

Back in November Mainzeal posted an announcement regarding their relationship with Vero (and its associated companies) for the purpose of undertaking earthquake reconstruction work. The announcement, which can be found here, is reproduced below.
In partnership with MWH, Mainzeal are VERO’s  preferred management services partner for building reinstatement, to undertake the efficient and effective reconstruction of their Canterbury earthquake claims.
This is a significant appointment for Mainzeal. Vero includes the following entities - AA Insurance, AMP General Insurance, ANZ and National Bank is underwritten by Vero, SIS Insurance, together with Vero’s own brand.
This represents three to six years work and covers the residential market for claims greater than $100,000 which includes homes that have to be demolished and therefore require total replacement. There are also significant commercial building market claims which will again include total demolition and re-build, plus many significant refurbishment and interior projects.
Notice the first sentence of the third paragraph where the estimated reconstruction time is three to six years!

EQC - Brisbane claim's office closed due to flooding.

EQC announced today that the Brisbane office processing earthquake claims has closed, as a precaution, because of the flooding. The announcement reads:
The Earthquake Commission’s contracted claims management centre in Brisbane has been evacuated due to the area’s flooding crisis.
“Although the office is located on higher ground on the edge of the city and is not expected to be inundated, we have heeded the advice of the local authorities to evacuate,” the chief operating officer of the Earthquake Commission, Lance Dixon, said today.
“Consequently, the office, managed by our contractor Gallagher Basset, now has a restricted capacity to make calls until further notice.

Wednesday, 12 January 2011

Advocacy help in dealing with EQC, insurance companies and councils - Part 2

In the previous post it was mentioned that CanCERN are suggesting an independent advocacy service as the best approach to handling issues and obstacles that arise for claimants when dealing with EQC and insurance companies. EQC's chief executive Ian Simpson, and Christchurch city mayor Bob Parker, oppose the idea.

CanCERN have identified a significant omission from the overall process as it stands, a mechanism for resolving problems where the major players form part of that problem. As events unfold some claimants are finding themselves increasingly in the role of "victim" through the decisions, indecision, actions or inaction of others more powerful and better resourced than themselves. On their own they invariably do not have the expertise, resources, or energy to bring the problem to a successful resolution.

Over time the number of people in this situation will increase to a significant size ( e.g. if there were a 0.5% or 1 in 200  problem rate that would equate to over 800 cases). In each case the claimant(s) concerned will find themselves faced with trying to deal with one or more extremely large organisation that don't seem able to coordinate with each other, or even operate with a high degree of internal coordination. In addition, large organisations are inherently hierarchical, with decision-makers out of reach of the client/customer/public, and go-betweens of varying levels of experience, knowledge, and ability keeping outsiders at a distance.

The current state of affairs will be convenient for EQC, insurance companies, and councils as it is an effective and efficient situation, allowing for quick progress to be made. A significant impediment to this progress would be the involvement of individuals and groups objecting to specific incidences of process, re-litigating decisions, or raising issues of transparency and  accountability. Each act of advocacy would tie up resources, cause delays and increase costs.

On the one hand we have what seems to be a drive for rapid and unimpeded progress and, on the other, a desire to ensure the needs of individuals are attended to, that each person receives due process, and those who cannot fend for themselves have others to advocate for them.

We need to be careful about where we end up on this. A "never mind the quality, see how much we've done" approach is not appropriate. Individuals in difficult situations should not be sacrificed to some large corporate goals euphemistically called efficiency and progress.

As it happens the EQC is the least of our worries. It is governed by different rules and imperatives than those of the insurance industry, and managed in a way that intends to provide fairness. They may be struggling but their intentions are of a public service nature.

Insurance companies are quite different. They are a commercial entity, exist to make a profit, and are under less obligation to provide transparency and accountability. One way of improving profitability is to reduce costs. Thus they have the greatest of incentives to pursue efficiency and progress while avoiding anything that might increase costs. Something to fear about them is that, to achieve this end, they may emulate ACC with its hard-nosed and at times intransigent attitude.

An advocacy service of some type is definitely needed.

Tuesday, 11 January 2011

Advocacy help in dealing with EQC, insurance companies and councils - Part 1

The front page of this morning's Press has an interesting article on issues relating to EQC, insurance companies and claimants. Basically, when disputes arise between either EQC or an insurance company and a claimant, or involving all three parties, nothing productive happens. Discussions lead nowhere and there is nowhere for claimants to take their problems for assistance in resolving them. The cases of an Avonside and a Dallington couple are described.

CanCERN are quoted as suggesting an independent advocacy service would be the best approach. EQC chief executive Ian Simpson feel this would be unhelpful, being just another organisational layer. Mayor Bob Parker is of the view that another service is not needed. A spokesman for the Earthquake Recovery Minister Gerry Brownlee has said an advocacy service was being considered. Tacked on to the end of the article is the sentence: "Claimants can contact The Insurance & Savings Ombudsman".

Monday, 10 January 2011

Fletchers - Project Management Guidelines

The final piece of useful information in the Information Update previously mentioned, is the following statement of Fletchers intentions with regard to how the project will operate.

Overall intentions
The project management team works on the following guidelines:
  • use existing industry practices and structure
  • local hire first, while identified resource pinch points will need to be sourced from elsewhere
  • accreditation for assurance and competence
  • steady work flow and prompt payments, for a reasonable return for all
  • a systemised approach, with good work practices
  • equitable, fair and transparent dealings, and prompt decisions
  • homeowner empathy and satisfaction
It is hoped that contractors and tradespeople will see themselves as a valuable part of the overall team, helping homeowners recover their asset value.
Exactly what that means for us, described here as homeowners and as claimants in another part of the document, is unclear. It is likely that the crux of it all for us will fall on the last word - satisfaction, where satisfaction will be more than a feel-good thing and incorporate agreement to what has been done, how it has been done and the warranties provided as to the suitability, quality, and integrity of what is delivered. 

The full document can be found here.

Sunday, 9 January 2011

Fletchers - Three strikes principle

In the Information Update (see the previous two posts) Fletchers also address the issue of contractors who fail to adhere to the rules set as part of their contract with Fletchers.

Adherence to Rules
Contractors who are found to be flouting the above rules will be governed by the "three strikes" principle – a first strike will result in a warning, a second in formal notice to EQC, and a third in public dismissal from the programme.
The original document can be found here.