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Friday, 23 November 2012

Southern Response Progress statistics update – Red Zone progress issues

Southern Response have updated their progress statistics to the end of October. The chart is here. The Red Zone statistics make interesting reading and add to concerns that a number of people will not be in a position to leave by the 30th of April 2013.

Of Southern Response’s claims 32% are in the Red Zones. All 2,131 in the Red Zones (100%) have had their assessments and costings completed, 98% have had offers, and 87% made decisions based on those offers (numerically this is 233 yet to make decisions, and there are also another 43 yet to receive offers). In the notes with the statistics Southern Response flag this gap as an area of concern.

Southern Response also report 49% electing to buy another house, 21% taking a cash offer, 9% as a customer managed rebuild and 8% rebuilding with Southern Response (see the NOTE below about the statistics published in the report).

Of those building with Southern Response (164 houses) 21 have been completed. The remaining 143 are made up of 59 under construction and  84 not yet started. While Southern Response note that the construction numbers will increase (a somewhat meaningless statement as there are no figures given), the approach of Christmas can be expected to slow progress and mean an as yet unknown number will not be finished by the 30th of April 2013.

Rebuilds that are customer managed (184) are not fully reported so there is no way of knowing how much progress, if any, is being made and how many will be completed by April 30.

Southern Response’s share of claims in the Red Zones is 2,131 properties, less than one third of all Red Zone dwellings. If their experience is typical of the progress being made then there are many hundreds of claims, decisions, and rebuilds experiencing delays, indecision, and the increasing possibility of not being completed by April 30.  If Southern Response has progressed more quickly than some other insurance companies then the situation is worse.  Actual numbers can only be speculation however it does seem there may be anywhere between 200 and perhaps 400 or more cases of households unable to move out come 30 April. That is a lot of grief if CERA decide to trespass and evict them.

NOTE:  Some of Southern Response’s percentages don’t give a clear picture of what is happening, being worked out on the overall number of claimants rather than on those in a particular category. An example is the statistic that 49% of claimants have elected to buy an existing house, a statistic based on the number who have chosen this option (1,045) compared with the total number of claimants (2,131) rather than the number of who have made decisions (1,849). In this situation it would be more indicative of what is happening to say 57% of those who have made decisions decided to buy an existing house.

When it gets to the number being rebuilt the percentages become increasingly meaningless. Rather than complicate life I have used Southern Response’s figures above, but they need to be reworked a little to have a better understanding of what is happening.

Earthquake Royal Commission – more evidence relating to the CTV building has been published

The Royal Commission has published more of the evidence provided for the hearings on the CTV building.

The documents can be found here or by going to the document library (here) and searching by putting Madras 249 in the building filter (upper right of the screen).  Unfortunately the search results, for the moment at any rate, are not presented in date order.


Thursday, 22 November 2012

Gib Best Practice Guidelines: Wet Areas

If you want to get an idea of what best practice looks like for repairing a bathroom, or having a new one built, there is a Gib best practice guide just out. It may come in handy to see if what you are being offered comes close to being best practice.

You can find it here.


Tuesday, 20 November 2012

EQC work in progress update

EQC have updated their Progress and Updates page with information on:

  • Land damage claims
  • Canterbury Home Repair Programme
  • TC3 drilling

The update is here.


Monday, 19 November 2012

Are insurers trying to shift costs to EQC and elsewhere?

In the most recent EQC Annual Report (here), EQC Chairman Michael Wintringham stated on page 4 that there was an incentive for insurance companies to minimise their own costs by attempting to pass them on to EQC or elsewhere.

In this environment, there is an incentive for insurers to reduce their own liabilities by shifting costs to the Crown or to other parties.

It would not have been out of place if he had continued to say that not only were there incentives for insurance companies to shift costs elsewhere, but also strong incentives for them to minimise costs by attributing as little value as possible where damage had occurred. The most obvious example is the exercise to turn rebuilds into repairs. Less obvious would be classifying some damage as pre-existing, or proposing repairs that weren’t like-for-like.

Insurance website reported today (here) that both VERO and the Insurance Council of New Zealand (ICNZ) reject Mr Winteringham’s statement and provides a lengthy exposition of both VERO and ICNZ’s position.

The report ends with the following:

New ICNZ CEO Tim Grafton wrote to Mr Wintringham, copying the letter to Earthquake Recovery Minister Gerry Brownlee, saying the comments convey a false impression and the council’s members reject any suggestion they would manipulate or reduce their own liabilities by inappropriately placing them on others.

Mr Grafton, who started at ICNZ a week ago, told he intends to work constructively with the EQC and wants to make it clear insurers will meet their legal obligations.

“The insurance companies are very clear that they will not be moving beyond the strict confines of all, or any, contracts in place in the wake of the Canterbury earthquake,” he wrote.

“Members of the Insurance Council feel strongly that the words used indicated that insurers may act in an unethical way and this will not be the case.”

My first impression on reading this was – yeah, right.