How long have insurers and the EQC been in discussions to create this scheme?
The new Natural Disaster Response model is something that has been evolving over a number of years.
Since 2016 Vero Insurance has been working in partnership with EQC to trial new approaches to managing natural disaster claims. This was to address what we learned about the impact of New Zealand’s dual insurance model during the Canterbury earthquakes, and investigate whether having both insurance companies and EQC managing claims was the right approach.
In 2016 Vero Insurance and EQC worked together on small pilot following the 14 February 2016 Earthquake. Under this model Vero undertook the assessment and management of these claims. This was the basis for the successful model that was used by the main New Zealand insurers for the Kaikoura Earthquake.
Following the review of the model used for the Kaikoura Earthquake discussions commenced on how a similar model would support customers and how to permanently embed it into New Zealand’s insurance system. The final agreement was signed in October 2020 and the Natural Disaster Response Agreement is now live.
This has been a significant piece of work over many years to ensure that our customers get good experiences and outcomes in what can be difficult times as a result of a natural disaster.
What problems will it solve for brokers and clients?
This new model means that insurers will be a single point of contact for all claims. Customers who suffer damage due to a natural disaster will no longer need to lodge two separate claims, one with EQC and one with their insurer.
This approach also means that there will no longer be the need for multiple assessors and the associated delays as was seen in the Christchurch earthquakes.
How can brokers process disaster claims for clients? How will it be different?
Under the new model insurers are acting as EQC’s agent for claims that are covered by EQCover. As a result of being EQC’s agent insurers will be working directly with customers in the same way that the EQC did prior to the model. However as an intermediated business, we expect that brokers will continue to have ongoing dialogue with their customers on the progress on the claims.
We believe that the implementation of the agreement will provide brokers’ customers with a much simpler process for the lodgement, assessment, and settlement of their claims for damage from natural disasters.
Are all Kiwi insurers on board?
Eight major insurers in New Zealand are part of this agreement - Vero, AA Insurance, IAG, Tower, MAS, FMG, Ando and Chubb.
But there are other insurers operating in New Zealand who aren’t part of the model.
When does the scheme begin?
This agreement commenced 30 June 2021, which means all events from 30 June 2021 will be managed by the insurers without the need for the customers to lodge separate claims with both their insurer and EQC.
What benefit will clients see from this?
The key benefit to our customers is that insurers will be a single point for all claims for natural disaster events.
This reduces confusion for customers over who to contact, and it also removes some of the double-handling that our dual insurance model creates. For example, instead of claims requiring multiple assessments, under this model insurers will be able to arrange an assessment against its own and EQC’s claims guidelines.
It will also mean that customers won’t need to wait for EQC to assess and agree their claim is over its cap (or lodge a separate claim) before they get any additional support their insurer can provide.
Will the claims process be quicker?
Yes, the agreement is intended to make the claims process both easier and faster for customers.
How can brokers find out more about this scheme?
We’d encourage brokers to get in touch with their usual Vero contact if they have any questions - our team will be able assist them.
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