Canterbury earthquake update



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Canterbury earthquake update Important information for NZI customers Please file this somewhere safe so you can refer to it throughout the claims process. July 2011

Earthquake update We ve recommenced rebuilds and repairs in parts of Canterbury We have recommenced our reinstatement programme in the north, northwest and rural Canterbury where there is no land damage and/or minimal risk of aftershock damage. We are continuing to review the areas where we are working in based on expert advice. How we re prioritising claims Assessment We appreciate that everybody s needs are important, however, given the volume of claims it s not possible to get to everyone at once. We are currently prioritising claims by location, focusing first on customers with homes in the red residential land zone. We are completing assessments in these areas first so that owners can decide which government payment option they want to take for their houses and land. When the red residential land zone assessments are complete, we will continue assessments in other zones. To find out which residential land zone you are in, please visit www.landcheck.org.nz. Houses with minor or no structural damage, non-eqc and contents claims are being prioritised as efficiently and effectively as possible. We ve developed a Getting started pack with guides to preparing your contents and non-eqc claim. Go to www.nzi.co.nz to download a copy. How we re dealing with properties with land damage There are properties in the green zone that will still require land remediation. Before we can repair or rebuild these homes, there is a significant amount of coordination and consultation that needs to take place with all parties on how land will be remediated. In some cases, we can t start works until the land remediation programme and your council s infrastructure reinstatement are completed. We re continuing to work closely with CERA, EQC, local councils, the Department of Building and Housing and other insurers on this matter and will provide further updates as information comes to hand. It s also important to note that repair and rebuilding work will also need to take into consideration the risk of ongoing aftershocks. There will still be some isolated exceptions where geotechnical assessments will be required due to major land damage. Understanding our project management process We ve partnered with Christchurch-based Hawkins Construction to provide their building project management expertise to our claims. Hawkins project managers have been assigned to work alongside our claims case managers to co-ordinate and manage the building process on our customers behalf. Under this partnership, Hawkins is responsible for the entire reinstatement process from selecting builders and other contractors, through to organising final inspections, ensuring compliance throughout for your benefit and the ongoing insurability of your property. We entered into this arrangement with Hawkins in an effort to streamline the rebuild/repair process for all parties. We recognise that some customers may want to be more (or less) involved, so there is flexibility for Hawkins to manage the project in full; in part; or not at all. One example of in part may be where a customer contracts Hawkins to manage the process using their own contractors, such as a builder they may have worked with in the past. Please contact your claims case manager to discuss this further. Accommodation assistance Under your insurance policy you may have cover for alternative accommodation for a set period. If you haven t yet used this, please contact us to discuss. However, when your alternative accommodation allowance finishes you will need to make arrangements to pay your own rent. If you need help to pay accommodation costs at that point, you can contact the government s Temporary Accommodation Assistance programme (TAS) where you may be eligible for a weekly subsidy of between $180 (singles) and $330 (families) per week, depending on the size of your household. Go to www.quakeaccommodation.govt.nz, or call 0800 673 227 for details. In order to access the financial assistance, you will need us to confirm that you have used up your alternative accommodation allowance/loss of rents under your insurance policy. We can provide a letter for you; just contact your claims case manager and they will be happy to assist. Please note that the assistance from TAS will not be back-dated so you should contact TAS now, before your allowance is finished. There are also four offices you can visit and more information available refer to www.quakeaccommodation.govt.nz. If you need any other assistance, including information on income support, please contact the earthquake government helpline on 0800 779 997. Our claims rebuild priority process We ve created a number of work streams (see flowchart on page seven), and are prioritising claims within each where there is no land damage and/or minimal risk of aftershock damage. Our priority process within each repair or rebuild work stream is: 1. Uninhabitable homes and those with severe structural damage will be prioritised first 2. We will also take into account other factors, such as owners who are elderly or impaired, or families with young children 3. Next will be houses with minor or no structural damage and non-eqc claims, such as paths and driveways. For further information, call your broker or visit www.nzi.co.nz 1 2

Quick reference guide FAQs NZI For further information call your broker or visit www.nzi.co.nz Canterbury Earthquake Recovery Authority (CERA) Tel: 03 354 2600 or 0800 RING CERA www.cera.govt.nz Government department established to provide leadership and coordination of the recovery effort, working with a wide range of government and other agencies. Land Check / Earthquake Government Helpline Tel: 0800 779 997 www.landcheck.org.nz For information on the status of land in Canterbury, including whether land will be suitable for rebuilding, and zone classifications. Temporary Accommodation Service (TAS) Tel: 0800 673 227 www.quakeaccommodation.govt.nz For financial and other assistance for homeowners who have had to leave their homes, or will need to leave their homes for a period longer than their insurance covers, while the repair or rebuilding of both land and houses takes place. TAS assistance is paid at a set rate and is not backdated so customers should contact TAS before their allowance under their private insurance policy is finished: ` `$180pw single, no children ` `$275pw married, civil union or de facto couple without children, or for a sole parent with 1 dependant child ` `$330pw married, civil union or de facto couple with 1 or more dependent children, or for a sole parent with 2 or more dependent children There are also four offices at: ``Work and Income, 231 High Street, Christchurch ``Linwood Community Link, 154 Aldwins Road, Linwood, Christchurch ``Papanui Work and Income, 7 Winston Avenue, Papanui, Christchurch ``Waimakariri Earthquake Hub, 24 Sewell Street, Kaiapoi Staff are also available in the Selwyn District as required, so residents in that area should contact 0800 673 227 to make an appointment. The NZ Red Cross Canterbury Earthquake Commission Tel: 0800 754 726 www.redcross.org.nz/earthquakegrant For grants available for people affected by the earthquake (conditions apply). Work and Income Tel: 0800 559 009 www.workandincome.govt.nz Information on services and resources available for businesses and individuals. Inland Revenue Tel: 0800 227 774 www.ird.govt.nz For latest information in relation to earthquake relief measures. Questions about your policy; excess and settlement options 1. Why do I have to pay an excess to EQC and one to you? The claims are with two separate organisations - the EQC which is owned by the government, and us as your private insurer. Depending on the size of your dwelling, up to the first $100,000 + GST of building damage is covered by EQC and an excess is required to be paid of 1% of the loss with a minimum of $200 and a maximum of $1,150. The balance of your claim is managed by us and the excess specified in your policy is also required to be paid. 2. My home is a total loss can I cancel my policy? We recommend you keep your insurance policy current to ensure you have EQC cover for future events including new earthquakes which may cause damage to your property. Your policy: ``may provide cover for other structures on your property such as outbuildings, retaining walls and fences that may still be of considerable value. ``may provide cover for liability arising from ownership of your home and land. In other words, if a building or fence were to fall and damage a neighbour s property you would be covered. 3. My home is a total loss why do I have to continue paying premiums on it? If you don t pay your premium, your insurance policy may lapse or be cancelled by your insurer for nonpayment. It also means that any subsequent damage would not be covered nor would you be covered for legal liability. 4. What are my settlement options? In general you have two options: ``Have your home reinstated, as similar as possible to when it was new using today s building materials and methods; or in other words like for like.* ` `Cash settlement for the value of the loss. Please check your policy document to clarify. * Like for like means reinstating your property to the way it was before the earthquake (and to the same size) with today s building materials and methods. Essentially, we want to ensure you are put back in the same position you were before the earthquake. Reinstating like for like Reinstating your home like for like is a relatively straight-forward process. If you want to consider options such as reinstating your home (like for like) on a different section, or making changes to your house such as modifying the layout, we can work with you so you fully understand the impact of these changes. In some instances it may be possible to buy an existing house instead of reinstating your current home. Please contact your claims case manager to discuss this option. Cash settlement If you choose the cash settlement option, we will pay the value of the damage/loss to your house only, not the land value portion of your property. This is because we do not insure your land, only the buildings on it. In the event of a total loss, a cash settlement is usually based on the market value of the home immediately before the earthquake. This may vary, depending on the type of policy you have. If you think you would prefer a cash settlement rather than reinstating the damage to your home, please discuss this with your claims case manager. As per question two above, continuing your insurance is vital. 3 4

Earthquake reinstatement options Questions about your repair/ rebuild We ve partnered with Hawkins to project manage the rebuild and repair process for our Canterbury-based customers. Building project managers will work with dedicated claims case managers to co-ordinate and manage the process on your behalf. A project office, managed by Hawkins, will be responsible for the entire process from selecting contractors through to organising final inspections. How does the Hawkins process work? Before construction starts, you will be introduced to a project manager from Hawkins who will select the main contractor for your repair or rebuild, and guide you through all details. This is a relatively straight-forward process and your Hawkins project manager is an expert in this area. The Hawkins process gives you access to qualified contractors and a dedicated project manager who is focused on ensuring the job is completed on time and to a high standard. Can I do it myself? Yes you can work with your own builder and have Hawkins project manage the reinstatement; or choose to manage the reinstatement in full on your own. If you d like to discuss these options please contact your claims case manager in the first instance. In the meantime, here are answers to some common questions customers have asked us: 1. My house is being rebuilt do I have to have everything in the same place? ``What about if I just want to do something minor e.g. shift a wall in the entrance? ``My existing roof tiles are asbestos and obviously I don t want those again. I ve found a different roof tile, can I have these? ``My house is being rebuilt and my kitchen is about 15 years old do I have to have the same kitchen or can I change it? ``Can I add on another bedroom? Your policy contract with us covers you to reinstate your home to as similar as possible to when it was new with today s building materials and methods. Obviously we would not replace materials that are prohibited today, such as asbestos. Where there is no material impact in terms of cost and code compliance, we will work with you to accommodate changes you would like to make. Please note, however, that any extra costs associated with these changes will be your responsibility, e.g. design, architecture and engineering costs etc. When it comes close to the time of your repair/ rebuild, your claims case manager will advise when your project manager will be appointed and you can discuss these details with them and they will guide you through the process. 2. Can I move the position of my house on the site? Yes, provided the new position is compliant with current council regulations and development controls; boundary rules for example. Please note any increase in cost compared to reinstatement like for like would be at your expense. 3. Can I build a smaller home? In short, most policies specify that your home is to be reinstated, like for like with today s building materials and methods. Also, we want to ensure you are put back in the same position you were before the earthquake. If you want to modify the layout or downsize the overall size of your home, these are options that we can work through together with you so you fully understand the impact of these changes. Please contact your claims case manager to discuss these in detail. 4. Why can t I demolish my house now? There is significant consultation that needs to take place first with all experts (EQC, council etc) in relation to how your land will be remediated and in many cases, homes may not be demolished. We are required to coordinate our work programme with the land remediation programme managed by EQC, Tonkin & Taylor and local councils. Your claims case manager will keep you up-to-date with specific information. 5. Can I build a prefab home on another piece of land I own until my land is remediated? Could I then have my prefab home relocated to another piece of land I own? In theory, yes, but potentially there will be additional costs that you will need to meet and this solution will need to be completed with full planning/consent. If we determine your home is a total loss we will meet the cost of rebuilding the home and this can be done at a different site. However any costs to relocate the building would be covered by you. Check with your claims case manager who will advise what your policy covers. 6. Will I be able to keep things from my existing house that are being replaced, e.g. carpet, drapes, heritage windows etc? If you wish to salvage items from your damaged building please contact your claims case manager. In some cases the value of the salvaged items will be deducted from your claims settlement. Your policy specifies that any items that are being replaced under your insurance policy become the property of your insurer (referred to as salvage ). However, we recognise that some items might be special to you and that you may wish to keep them. If this is the case, please contact your claims case manager who will be able to advise you on any specifics. ``I ve got concrete roof tiles but I d rather have corrugated iron, can I do this? 5 6

The earthquake claim process EQC Lodge claim with EQC NZI Lodge claim EQC obtain verification of insurance cover from NZI Claim number assigned, Claims Case Manager (CCM) appointed as single point-of-contact Claim number assigned, assessment commences CCM assigns claim to assessor EQC completes assessment Assessor visits property and makes initial assessment (repair or rebuild) If the claim is likely to be less than the maximum amount EQC will pay, EQC remains responsible for managing and settling the claim If EQC confirms the claim exceeds their maximum level of cover, responsibility for managing the claim is handed to NZI EQC and NZI agree assessment CCM activates reinstatement with Hawkins Project Manager (PM) appointed. EQC settles Rebuild Repair Commercial Non-EQC e.g. paths, driveways opts for a cash settlement Build scoped, Repairs scoped, PM arranges further assessment/scope and price agreed Repairs scoped, PM undertakes further scoping, assessor reviews and makes recommendation (Approx four weeks from rebuild) pays NZI EQC settlement (Approx four weeks from repair) pays NZI EQC settlement reinstatement commences Repairs released in order of priority on workflow system CCM discusses settlement with customer reinstatement commences repairs commence repairs commence Please note: This information sheet is a guide only. For a complete description of your cover, refer to your policy wording, policy schedule or any other relevant policy documentation. You can also contact your claims case manager for detailed information in relation to your claim. This diagram is a high level summary of a typical earthquake claim process. Each claim is different and some may involve more steps. There is also significant coordination and consultation that needs to take place with all parties (CERA, EQC, councils etc.) in relation to how land will be remediated, which has an impact on the reinstatement of some homes. We cannot start reinstatement until the land remediation and the relevant council s infrastructure programme are completed. Please contact your claims case manager for further information. NZ5591B/1 07/11 Printed using vegetable based mineral oil free inks on paper from an environmentally certified and responsibly managed forest and mill.