Tower Insurance yesterday advised it has lodged formal proceedings against the government-run Earthquake Commission (EQC) for more than NZ$80m ($48m) which the insurer said it is owed for rectifying building issues on EQC’s behalf.
EQC provides natural disaster insurance for residential homes, land and contents. Following the 2010-2011 Canterbury earthquakes an unprecedented number of claims were lodged with the EQC, which resulted in significant delays for customers. Rather than waiting for the EQC, many private insurers took action and worked with their customers to rectify land and building issues that should have been completed and paid for by the EQC.
Tower said that it, along with other insurers, paid for the completion of this work to enable repairs faster than what would have otherwise happened, with an understanding these funds would be repaid.
Tower is seeking to recover monies from the EQC for the remediation of both land and buildings and had entered an alternate dispute resolution process with the EQC regarding its building claim. However, Tower has been disappointed in the lack of progress made and sees court action as the only viable way forward.
Tower CEO, Richard Harding, said that Tower has long maintained that the current EQC system is broken and needs a complete overhaul.
“The refusal by EQC to pay what is owed and the resulting court action is just another symptom of an ineffective and inefficient EQC structure that has led to long delays and poor community outcomes.
“The cost of EQC’s inaction impacts all New Zealanders, resulting in higher costs, longer repair times and confusion about who is responsible for what.
“As well as taking this court action, we are strong advocates for insurers to manage major event claims from day one, as was successfully done for the Kaikoura earthquake.”