Business claims reach $900M
01 Feb 2017
Business insurance claims for the November earthquakes centred on Kaikoura have passed $900 million, the Insurance Council of New Zealand says.
The November 14 Kaikoura earthquake caused devastation and severed transport links to the town which is reliant for its income on tourists, but it was in Wellington where the bulk of the claims have been made.
"It is early days and the figures may change but indications are that there are more than 2500 commercial material damage and business interruption claims worth more than $900 million," Insurance Council chief executive Tim Grafton said.
That is only for claims made to New Zealand insurers as some businesses are insured directly by overseas-based insurers.
The brunt of the claims has come from the Wellington region with two thirds (65 per cent) of the total claimed losses, followed by upper South Island, which represented a quarter of the claims by value.
Business claims from Canterbury represented just 8 per cent of the total.
It was too early to indicate the value of residential claims, Grafton said. Homeowners had until February 14 to notify their insurers of any claims.
Peter Townsend from the Canterbury Employers' Chamber of Commerce advised businesses to learn the lessons of the 2010 and 2011 Canterbury earthquakes.
The first was for businesses to make sure their brokers were doing their jobs properly.
"Some brokers were a lot better than others," Townsend said.
Business owners who were dealing directly with insurers needed to make sure they had a rock solid, no surprises relationship with their insurers, Townsend said.
He also warned businesses to understand what they were covered for.
It was important to get advice, as business owners could make mistakes that turned out to be costly.
After the 2010 and 2011 earthquakes, some businesses rushed to open their doors again, he said, with the result that they undermined their business continuity cover.
"People did their best to get their businesses back up and running," he said.
The trouble was insurers were then able to say their businesses were open again stopping the clock on their business continuity cover, even though they were running at only 10 per cent capacity.
Gary Young from the Insurance Brokers Association said the wording of some business continuity insurance policies could be problematic.
"You are obligated to minimise your loss, so you can get caught out," Young said.
He advised business owners to work closely with their brokers to ensure they present their claims in the best light possible.
One positive for business owners is the delays that stalled claims after the 2010 and 2011 earthquakes should not be repeated, he said.