AMI's Response to CanCERN's Questions July

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1 CanCERN member Questions and Statements in Black. AMI's Responses in Yellow Please note that there are a number of questions that refer to specific claims which could not be answered by AMI. These unanswered questions need to be put to AMI by the homeowner. The following responses were put together by AMI in under a week and included a 4 hour meeting with AMI managers who answered all questions we put to them. This information is for use by CanCERN and CanCERN members only. A: Assessments Q Assessments in the Red Zone have become a matter of utmost importance for both parties. Will AMI allow full participation of the home-owners in the assessment? Yes customers will still have appointments made and have input into the process. Q If a house has already been deemed uneconomic to repair will re-assessments be made and, if so, why? No Q Will all issues identified be pointed out, described, and any significance explained, at the time of assessment? If not, when will they be? During conference meeting, AMI/Arrow/Customer Q Will home-owners be permitted to submit their own list of issues or query assessments, and will this be added to the inspection file and form part of the decision making process? Yes, when initial DRA is sent by Arrow, opportunity to review and comment and again during conference discussion Q Will AMI/Arrow agree that at the end of the inspection there will be no obligation, or pressure, to sign any agreement? Yes no pressure Q Does AMI agree to make available a full copy of the assessment, along with any and all associated documents, and costs before AMI or Arrow ask for consent to a project plan, to demolish, or to proceed with any other activity? Yes Q Does AMI agree that time will be allowed for home-owners to seek advice on the content of any agreement, acceptance, consent, or other document to be signed? (this process may include, but not be limited to, obtaining advice from building specialists, geotechnical engineers, insurance companies, lawyers, mortgage holders.) Yes Q What process will AMI provide for questioning or challenging an assessment, the conclusions drawn from an assessment, or the recommended solution(s)? During the discussions and leading to settlement conference plus a dispute resolution process and our internal advocacy process Q Where the Repair/Rebuild outcome of an assessment is a matter of comparative cost, will AMI provide the claimant with details of their costing? If not, why not? General terms but some commercial sensitivity around some aspects Q Will there be a mechanism for identifying and prioritizing clients who need to be assessed promptly? Yes Q Is there a timeframe in place when the full house inspections are to be done? If they are doing these by suburbs can they advise the timeframe and which suburbs are being inspected when? Yes and the aim is to complete all by December. Outbound calls and notifications to customers advising priority queue Q Arrow assessed our $305,000.00, AMI Offered $253, They have not provided a breakdown, are they entitled to give us a breakdown? The insurance policy is for replacement value, why there is so much difference? Need to have specific details to clarify but varying options selected can have different payment outcomes that are explained during conferences with customers S Our dealings so far with AMI have been reasonably positive HOWEVER... The building company they are using concerns me. We have a property on Mt Pleasant Road which is very badly damaged. We got our own engineer to do a report on it. His findings were that the building

2 needed to be demolished with urgency and that "no amount of repairs would bring the building up to a satisfactory standard," We then had a full assessment with EQC who recommended the building be "removed and replaced" and their costing for repair came to $862,300. The property is not worth that amount. Arrow International came around on behalf of AMI and the builder there said he might try to repair! Need specifics to clarify this S After the 4th Sept, things were going along nicely. We had the EQC team out twice. We then had a lady from AMI. (Australian from Adelaide). She looked through and like the four people before her, she advised that the house was not repairable and would be a rebuild. This lady also took all path measurements and her words were, This is going to take a long time to fix. I replied Do you think it is fixable. No not at all was her reply. - Then the 22nd Feb happened. Since then we had two people from Arrow on AMI s behalf. They spent over five hours here and left telling us that we would here from AMI in about two weeks. Then out of the blue we get a further visit from Arrow who had a different person with them. He left with a comment You know this is fixable. So what do we have: Yes the rules are changing and AMI have instructed the people that are in the field with new instructions. We have since left three messages with AMI asking that they contact us. No one has rung us back. Details required B: Repairs Q What engineering resources will AMI use to assess the state of the ground prior to repairs on land that incurred damage? [Note: this is an insurance company responsibility - see footnote 1 ] Full geotech on repairs Q Will the results of, and the recommendations arising from, these tests be made available to claimants before any agreements are entered into? If not, why not? Yes if needed before Q What is this about external repairs having to go through Auckland? Two operational centres, One AKL and one Chc. Chc deals with the major house damage claims. Plus we have a base for potentially more issues in the unfortunate happening of a further significant event. We can be operational during disruption. Q When will AMI come for the assessment of damages not covered by EQC like drive way, garden fences, gates and garden wall, garage? Outbound call and schedule to be advised S Our claim is for driveways, paths and walls. Cracks and gaps between slabs have now started filling up with silt etc, and we re worried that when they finally get around to inspecting they are not going to see the full extent of damage and may just rule they were existing. Need to point the issues out to the person organising. Some issues because of zone uncertainty, ongoing seismicity C: Rebuilds - in situ Q What engineering resources will AMI use to assess the state of the ground prior to rebuilds on land that incurred damage? [Note: this is an insurance company responsibility - see footnote 1] Full geotech as required Q Will the results of, and the recommendations arising from, these tests be made available to claimants before any agreements are entered into? Yes as required 1 Department of Building and Housing, 2010 Guidance on house repairs and reconstruction following the Canterbury earthquake e.g. p50

3 Q Where the entitlement is based on a sum of dollars per square metre (e.g. $1,400 per sq m), will the purchasing power of that sum be: based on the retail price (i.e. the price an individual would pay for a house) leveraged to the full extent that AMI can use its purchasing power to reduce prices? Ie. an insurance company could say a particular building has a retail value of $200,000 but negotiate a much sharper price. That way it saves itself from making a full payout. This is why claimants wanting to take the cash don't get the full value. What are the legal standings on this point for the resident? Based on market price to do the work, AMI accepts the issues of inflation, building price changes etc as the rebuild accelerates. Customer can dispute and we will have a defined process to allow disputes to escalate where uncertainty etc emerges D: Rebuilds elsewhere Q Will AMI being offering or facilitating land and building packages? Not intended at this stage Q Most home builders direct their work at the upper end of the market (big and expensive houses). Will AMI provide assistance with finding designs and builders for the modest end of the market (in the 90 to 150 sq range?) Yes, Arrow are managing this, all options available 25 plus group builders Q How long will a claimant have to decide where they want to build? Indefinite but there will be some factors that arise where the matter may be determined by another reason, unsafe homes, government packages etc. Reasonable time frame. E: Quality / Warranty / Guarantee Q As the insurance claim is between the claimant and AMI, will AMI warranty the work done on its behalf for the claimant? Yes where Arrow managed Q There is a long chain from AMI as insurer through PMO, contractors, sub-contractors and possibly further. Does AMI accept responsibility for the quality and longevity of the methods, materials, and workmanship employed at all levels of the chain? If not, why not? Yes where Arrow managed Q Will AMI/Arrow allow claimants the opportunity to vet the nominated contractor and to disagree if they feel the contractor is not suitable? If not, why not? Yes but with qualification. F: Project planning, timetables, delays and problem resolution for repairs & rebuilds Q Will AMI/Arrow provide home-owners with a project plan showing the work to be done, the projected start time, duration, milestones and completion date? Yes Fully managed process Q Will the project plan also provide a list of eligible contractors so a selection can be made on the basis of the home-owners preference for quality and suitability? Yes discussed at handover meeting Q Will AMI agree a mutually suitable start time with the home-owners, with no pressure to fit into a wider PMO project schedule? Yes within reason Q Will AMI agree that where home-owners are to vacate their property no work will start until accommodation suitable to home-owners needs have been found, and that no pressure will be applied where suitable accommodation proves difficult to find? Yes and again within reason Q Will AMI/Arrow provide regular written weekly reports for any projects that will take more than four weeks? Will depend on project, fortnightly or

4 monthly Q Will AMI/Arrow give adequate notice when the project is behind schedule and unlikely to be completed on time? Yes Q Will AMI/Arrow provide additional (actual and reasonable) accommodation costs when the project falls behind schedule and the initial accommodation monies are exhausted? No Q Will AMI provide a fast track mechanism for investigating situations where the home-owners, or their agent, consider there has been a deviation from the project plan or that the quality of materials or workmanship are unsatisfactory? Yes G: Insurance Policy Q Does floor area mean real floor space (inside measurements) as I understood the AMI Agent when I took up the insurance or does floor area mean foot prints (outside measurements)? Real floor space, external measured Q Will AMI provide full insurance cover for the property being repaired or rebuilt from the start of the project until the moment of hand over? Yes, Q Will AMI provide full insurance cover for all repaired and rebuilt properties once they are completed? Yes but there are some concerns people must check out if doing their own repairs. There is a normal stop on cover of existing homes when under major repair but AMI agrees to cover if they are arranging the rebuild. Q Is it true, that a total replacement policy only operates if you house was destroyed by fire and the new house could be built on the same land? No Q We have lodged 3 claims with EQC (1 after each earthquake) and notified AMI. We understand that as our house is considered structurally OK the full assessment is not a priority but we have concerns about the grounds - retaining walls and steps and the front fence. Whose responsibility is this? All land related matters are the responsibility of EQC H Buying an existing property Q If we want to buy an existing property, can we have the same amount of money as if we were to have our house rebuilt? Yes but there can be small differences Q How is the amount of money available to purchase an existing property calculated and why is it calculated this way? Rebuild costs is the basis of calculation I Red Zone issues Q Prior to February 22 (or June 13 as the case may be), emergency work was carried out on properties to enable residents to continue living there. This work was related to one or more of the following: safety, structure, heating, sanitation. When checking with AMI claimants were told this would be at no eventual cost to them as the amount would be deducted from their accommodation entitlement. Will this be honoured for those in the Red Zone? Yes but we will be cautious with ongoing work in red zones now that the government has announced a decision about the ongoing future of these zones Q If a home is considered repairable, and the owners choose to remain in the Red Zone, will AMI repair 2 the house and subsequently provide full 2 including obtaining all necessary permits and compliance certificates

5 insurance? No nor will they be able to continue with insurance cover in the zone Q Some Red Zoners have been told they will have to wait until September for Arrow to send someone to assess properties and do the scope of works. Factor in the behind the scenes paperwork, inevitable delays, discussions about findings, assumptions and costing, plus statutory holidays and it may not be December or January before claimants will know where they stand. Can AMI/Arrow give a timetable of where assessments will be carried out, when, how long the process will take, and at what point claimants will receive Arrow's assessments? All properties are to be fully assessed by Xmas but red and orange zones are receiving priority at the moment. All red zones will be assessed by September and the decision packs arrive as soon as possible after then. Some packs have already been sent to customers and we will continue dispatch as they become available from Arrow Q A crucial factor for some claimants will be the coincidence of Arrow and its activities and school examinations. Can AMI/Arrow consider this with its contacts of residents? Arrow will call in advance Q Residents would like to negotiate ownership of certain chattels in their homes - is this a possibility? If option 2 is taken, then that can be considered but there are some issues that exist in option 1 with the government package. Discussed at settlement/handover meetings generally handled by the demolition companies Q When looking at the pricing of a repair if the resident takes the govt offer for the land and insurance company offer for repair - will this include the price to repair up to the building code as required on that specific date, e.g. double glazing? Who then is responsible for the demolition costs? Repairs would not include double glazing. Demolition costs as still being discussed between CERA and the insurers but it will ultimately be one of them. Q If a house is not badly damaged will removing it to another piece of land be an option? Yes but there are many issues to consider which can always be discussed as individual cases arise. Q When will we receive our packs with our figures? What will the insurance offer with respect to a rebuild, cash settlement or buying an existing house be like and how will a mortgage affect these options? Aiming to get them all to customers by October. It will be necessary to have mortgagees view and assent to the action path selected. Q Would AMI produce a list of all of the items that could appear on a scope of works so that when homeowners check their scope of works the chance of missing something is greatly reduced? Yes, DRA J AMI 's relationship with claimants Q Will AMI work with residents groups, or CanCERN, to agree a code of conduct setting out the needs and expectations of both parties to govern the processing of claims, repairs and rebuilds once they have been passed along from EQC?(something like a mutual FAQ).Need to give some further explanation here to clarify. Q Also apparently we have 4 new case managers and our other case manager is no longer in charge of our claim. How can you deal with 4 people? Why can t we have one qualified person to deal with? We have pods linked to the suburbs. This is a group of people who specifically deal with all aspects of the claims in that area. While you may speak to several people, all will have an awareness of what is happening with your claim. These are often long term issues so as people leave, there is continuity in a group hence the pod+. Q Why are not AMI stores open Saturday & Sunday? What reason would you want that? Evidence suggests to date that only limited requests are being received and we are constantly re-evaluating customers requests to meet the needs. Q Can you also please ask if the insurance options can be made available before or at the same time we receive CERA offer so residents can make

6 informed choices? We are sending information packs to customers now and will continue to send them as the work is completed. Some may arrive shortly after the government package but all will be sent by October Q Can advice be given on making offers on a new place while we are waiting for assessments etc? No, we cannot provide that type of advice S need clearer communication - seems a lack of returning calls etc especially to people who work fulltime and require to speak to an AMI rep after 6pm. We want this to be improved and if customers can give us their preferences, we will endeavour to meet these requests. S We have had next to no communication from AMI. However they did phone us within a couple of hours of the zoning announcements to see whether we had made our mind up which I thought was very insensitive especially since it had only just been announced and we had/have nothing in writing yet. Please give us some details because it would not be our intention to press people in this manner. We have certainly rung customers to help with priority setting and introducing pods. S So far we have not been contacted by phone at all. Our pods are trying to make contact with all customers but if you have not heard from us, please give us details. There can be items like out of scope matters (paths, driveways and the like) which are being handled in Auckland S We are with AMI but we are very confused as after September EQC and AMI both said house not fixable. Arrow international came after February and now house can be fixed. How can that be? Now after June have just been told arrow have to come back to do it all again. But have no idea how long that will be. Can we have the specific details please? S We are in the red zone and spoke to AMI yesterday, we re in a Pod... said that we would be assessed by end of September That is correct S My sister and I share a house in Mt Pleasant and have both house and contents insurance with AMI. Our experience is that communication is very poor. Though the reception/call centre staff are courteous and undertake to pass on concerns there is no response to these. Even when messages are sent to the address these are not acknowledged. Please supply details S We are with AMI... when I called the day after the announcement we were told we would be seen within the next 8 weeks. I had some questions which a lady answered. When I called the following week as we are now in a POD, I was told we would be seen by the end of September and was given very different answers to my questions the week before, I was asking what happens with the re-build, ie can we change anything around or add another bathroom etc. There are some variations permitted but we would cover that during our settlement discussions. Additional costs would be at the customer expense, variations that are major can have significant issues of consents. S We are handling my son's claim and his insurer is AMI. The level of service is absolutely appalling. His is a red stickered property and coincidently their first visit to the property to assess it is this morning. (July 8) Can we have details S I've spoken to AMI several times and each time they claim to have lost the record of the previous conversation/interaction. Ironically, this last time a representative called me and "apologised" for their poor communication and said this is their attempt to improve communications. She then proceeded to an "interview" that had been done a week earlier and when I pointed that out, sure enough she could find no record of the previous interview, nor did she follow up with me as promised! We are in a somewhat unusual situation of being here on a visa that will expire soon, so we need to resolve these insurance issues as soon as possible. Details please K AMI and Contents Insurance Q We have a contents claim in with EQC since March. Which will total over $20,000. Will AMI pay for the claim that goes over this amount and can AMI speed up EQC? Yes and no Q House, contents and car don t seem to be in the same place. Why can t I talk about all my different insurances with AMI with one person? The sheer scale of this event has required us to make special arrangements for managing the claims which has resulted with different teams managing

7 segments of claims. We will try and coordinate where possible. S With regards to the contents from AMI, we are not getting any clarity about our claims! So just about to them again L AMI and Accommodation Payments and Rented Properties Q Could payments for accommodation be more efficient? Also statements on how much we have used up and when our accommodation runs out so that we can know when to start applying for the government support. Details please Q Does each new event mean that the accommodation payments could start again if we claim for each new event? No, if uninhabitable, generally one claim only S We are AMI customers and own a house in the red zone which we rent out. Our very good, long term tenants have just moved out as they are fed up with having no sanitation, no water pressure, intermittent services such as power and water, silt under the floor which is making the house very damp, and also the house seems very unsafe as it shakes terribly when buses etc go past. We have advertised the house for rent, but understandably not one person has been interested, so as we have Loss of Rent Insurance with AMI, we assumed that as we are unable to put a tenant in the property due to all of the above issues, that AMI would immediately start covering the weekly rent until such time as we settle the sale of the property. So far, AMI have denied that the house is un-rentable. Details please M Green Zone Customers Q When will the process begin? Happening now and work being done, settlements made and repairs initiated Q What is AMI doing on our behalf to support EQC to get through the process? We really have to focus on the issues that we need to manage for our AMI customer matters. Both organisations are getting the processes working together more effectively