Saturday, March 30, 2024

PULPIT: A good deal for rural NZ

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Increasingly, storms, flooding, earthquakes and other natural disaster events are impacting New Zealanders. FMG’s Nathan Barrett explains how the Natural Disaster Response Model came to be and the benefits for clients at claim time. The 2010 and 2011 Canterbury earthquakes and the 2016 Kaikoura earthquake were both life-altering events for many and sadly, the impacts of all three quakes still resonate today. In between quakes, the last decade has also been interspersed with other natural disasters, including significant flooding.
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Recent events that come to mind include the 2017 Edgecumbe floods, in 2020 there were the Timaru Hailstorms, the once-in-500-year storm that flooded Northland, the once-in-250-year Napier floods and the Motueka Boxing Day hailstorm. In June 2021, we saw the Canterbury flooding.

After more than 20 years in the insurance sector, I understand that enduring a natural disaster and the immediate days after the event is immensely challenging. I’ve also come to understand that arguably just as challenging is the road to putting things right. There’s the aftermath, the clean-up, the emotional processing of what occurred – and the return to a sense of normality.  

As an insurer we hear that it’s this road to normality that can have a significant impact on people – for better or worse. Our claims and assessing team hear first-hand the struggles faced by clients and often and willingly provide support outside the scope of insurance. 

When natural disasters like earthquakes, volcanic eruptions, hydrothermal activity or even landslips occur, if your home is insured, then New Zealand’s Earthquake Commission (EQC) is the agency tasked with settling the first portion of your house claim, as well as certain land damage caused by the event.

For thousands of people following the Canterbury earthquakes, a return to normality was – or still is – an arduous process.

People need to work through a dual claims’ process: one with EQC up to a capped level of damage and one with their private insurer for elements that EQC does not offer cover for, and/or once the claim exceeded EQC’s limit.

The findings of a Public Inquiry into the Earthquake Commission were released in April 2020. It focused on the operational practices of EQC and the outcomes of claims for people, with the aim of making a positive difference for all New Zealanders in the future.

Fast forward 15 months and a collaborative approach later, and the new Natural Disaster Response Model is live. The new model means that if your home is impacted by a natural disaster and you need to make a claim, then all you need to do is contact your private insurer. Essentially, private insurers will act as agents for EQC. 

Since the Canterbury earthquakes, FMG has been a strong and vocal advocate for this change. We instigated discussions with EQC and other insurers, recognising that at an already stressful time for our clients’ the road to recovery could be much simpler with a single point of contact.  

We were pleased that after the 2016 Kaikoura earthquake FMG and other insurers had a temporary agreement to manage claims on behalf of EQC. We know from many of our clients that this arrangement worked well for them. It also worked well for us, knowing that we could help get our clients back on track.

The new Natural Disaster Response Model is not just for major catastrophes. It will also cover the smaller, everyday claims like localised landslips, once again keeping it simple for you. 

As a direct insurer we put immense value on our client relationships and making sure that at claim time we’re keeping it simple and easy. This includes that our claims and assessing teams are supported to offer the same level of service that you’ve come to expect from us.

Who am I? Nathan Barrett is FMG’s chief product and pricing, underwriting and claims officer.

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