Set insurance firms a deadline, expert advises

Posted on 20/03/2013 by Michael Wright

Set insurance firms a deadline, expert advises

By Michael Wright in the Press NZ 20/03/2013

The Government needs to follow Australia's lead and impose time limits to fast-track earthquake insurance claims, an insurance expert visiting Christchurch says.

Jay Feinman, a law professor at Rutgers University in New Jersey in the United States, will speak at the Seismics and the City forum tomorrow. Feinman, an expert in insurance practices after natural disasters, said insurers' response to the Christchurch quakes had been disappointing.

"It's been two years-plus and what we see here is the same thing we see around the world. Global insurance companies follow the same claim practices more-or-less wherever they operate. I don't think they've honoured the promises they made to their policy-holders.

"I think the Government needs to do here what was done in Australia, which is impose deadlines which will at least force companies to the decision point."

A review of the Queensland floods in 2010-11 recommended a four-month time limit, subject to exceptional circumstances, for insurers to determine liability - a move accepted by the industry.

Some outside regulation of the sector was also needed, including a requirement for insurers to disclose publicly some performance measures, he said. "You would want to know which insurance company is best at paying claims promptly for full value and which is not. That information's not available. It's available [overseas].

"The information has to come from the companies themselves and the companies are never going to provide it voluntarily, as they don't anywhere else."

Insurance Council chief executive Tim Grafton said arbitrary time frames would not cater for Christchurch complexities, such as apportionment.

"It's all very well saying here's a magic wand, this will be the date by which everything will be settled, but the important thing is to settle it properly. It's all right coming in with solutions that have worked elsewhere but we need a New Zealand solution for New Zealanders."