Canterbury earthquake claims payouts pass $12 billion

Insurance payouts for claims from the 2010 Canterbury earthquake have topped $12 billion, the Insurance Council of New Zealand reported Wednesday.

As of the end of June 2014, private insurers had paid out $7.7 billion in commercial claims and $4.4 billion in settling residential claims (over cap and out of scope) totalling $12.1 billion. In line with projections, 80% of commercial claims and 66% of residential claims are now fully settled, the organization said.

Out of scope claims are those outside the scope of New Zealand’s Earthquake Commission (EQC), including driveways, pathways and swimming pools and over cap claims are those above the $100,000 plus GST cap for the EQC.

“Insurers are currently paying out $11 million a day to get Cantabrians back into their homes and enabling businesses to move forward,” the council’s chief executive Tim Grafton noted in a release Wednesday.

“The settlement of Canterbury earthquake residential insurance claims has definitely reached a turning point with 50% of all over cap claims now fully settled and 72% of the out of scope claims completed,” he added.

There were 64,320 out of EQC scope claims (such as pathways, driveways) with 46,317 (72%) now fully settled.  

At the end of the June quarter, insurers had 22,739 dwelling claims over the EQC cap, according to the Canterbury Earthquake Recovery Authority (CERA) survey, 284 more than the quarter ending in March.

“Private insurers have reached the halfway mark by fully settling 11,392 over cap dwelling claims, including the completion of 2,203 rebuilds and major repairs,” Grafton added. Last quarter, 1,517 over cap claims were settled, double the previous quarter, the council also noted.

Of the 11,347 over cap claims remaining, 8,110 insurer-managed rebuilds and repairs are in progress: 1,611 (20% of 8,110) are currently under construction; 442 (5%) in consenting with a local authority or government agency; 1,089 (13%) under contract(when a building contract has been signed by the customer but work on site has not yet started).

The balance of insurer-managed major repairs and rebuilds are in pre-design (scoping or collection of technical data), detailed design (with a designer/architect) or pricing (tender or pricing for construction), the council noted.

“In spite of insurers receiving over 700 newly over cap dwelling claims from EQC this year, they’re still confident almost all major repairs and rebuilds will be completed by the end of 2016,” Grafton added.