Sum insured – what amount should you insure your house for? What could go wrong?

As mentioned in previous posts, future house insurance policies will be based upon what YOU have assessed as being the cost of rebuilding. This isn’t just the cost of time and materials, it also includes costs relating to demolition and disposal of the rubble, surveys, local and regional council consents, legal fees, plus others that are complex (e.g. disposing of asbestos) or don’t come to  mind at the moment. You also need to know what limitations or conditions insurers put on certain aspects of your property (e.g. the technical category of your foundations, retaining walls, hazardous materials). It is not going to be easy to get this right. Get it wrong and you loose in a devastating way.

Not only is it going to be a difficult exercise there is also, as highlighted in a recent item on the Australian insurancenews.com website (here), the issue of avoiding unqualified valuers.  In that item NZ Property Institute CEO David Clark is quoted as saying:

“We are concerned that these so-called professionals have no training or qualifications in valuation or quantity surveying,” Property Institute CEO David Clark said.

“Worse, they may not carry professional indemnity insurance, giving you virtually no recourse in the event they let you down.”

Many thousands have experienced the incompetence of EQC’s assessors, so the warning is timely.

Adding more smoke than light to the situation, the Insurance Council of New Zealand (ICNZ) Insurance Manager John Lucas is reported as saying insurers offer online valuation calculators tailored to their policies.

“The council believes they should be fairly accurate, but often people want second opinions and we would be very concerned if homeowners were being duped by people who were not qualified,” he told insuranceNEWS.com.au.

“It can have devastating consequences if you are underinsured, and if you are overinsured you are throwing money away.”

This seems a reasonable enough comment to make, until you read the disclaimer that is associated with such on-line calculations (e.g. here):

The Cordell Online Calculator does not necessarily take into account every feature of your home, nor does it provide advice. So, if you haven’t been asked about a certain feature of your home by the calculator or you want advice, you should contact a builder, architect, valuer, quantity surveyor or other building expert to help estimate your Sum Insured.

How exactly do you reconcile “fairly accurate” with “does not necessarily take into account every feature…”? As an aside, are builders and architects the most suitable people for the job?

As far as I can tell on-line calculators don’t cater for TC foundation categories so, if this is correct, they are a waste of time for everyone in Canterbury. More importantly, if this is the case, why did ICNZ’s John Lucas say: “The council believes they (calculators) should be fairly accurate …”  Surely that is confusing at best and, more probably, quite misleading. 

It should be incumbent upon the ICNZ to prepare a list of what qualifications or accreditations will be accepted by its members as suitable for the purposes of their insurance policies. Failing that, each insurance company should produce a list of the categories of trades and professions they consider acceptable for the purpose of creating a sum insured figure.

EQC, floor levels and (in)competency

Yesterday Radio New Zealand (here) ran an item where EQC was accused of:

“employing unqualified surveyors to measure how level floors are – using inadequate measuring methods – and thousands of houses are being wrongly assessed.”

To this EQC spokesman Bruce Emson, said:

“the commission’s surveys are carried out by suitably qualified quantity surveyors and comply with all building and housing guidelines.”

Where does the truth lie? The two times our house was assessed, EQC used bog-standard builders to determine the state of the house. The first builder didn’t know how to use the laser level he had brought with him, and it took him nearly 30 minutes to get it operational. Once operating he measured only the easily accessed bits, despite offers to move furniture for him. This experience does not exist in isolation, so how can others know whether their property was accurately assessed by someone suitably qualified for the job? The first thing is to deal with the semantics of the EQC response. What exactly is meant by “suitably qualified quantity surveyors”? To me it is an response designed to mislead the public by confusing the issue. The criticism is that EQC has not had critical measurements made by professional surveyors – people trained in accredited institutions and professionally certified as competent to measure distances, heights, and slopes. In reply EQC have, for some time,  responded that they always use suitably qualified quantity surveyors. Herein lies the deception. EQC claims to uses quantity surveyors. Quantity surveyors are not highly trained to make accurate survey measurements, their training is in costing repairs and rebuilding projects.  They are not suitable people to measure floor levels. Not only that, but EQC are also coy on what is meant by “suitably qualified”.  Does this mean that they are members of the New Zealand Institute of Quantity Surveyors?  Unlikely, as the Institute only has about 150 members in the whole of New Zealand (see their website here). So maybe “suitable qualified” means something less formal – they have undertaken short EQC in-house or contracted training and that is good enough for the job? In the absence of clear evidence from EQC, it is valid and essential to act on the basis that until proven otherwise unsuitable people were involved in making assessments about your house. Your current and future housing wellbeing is quite likely in the hands of people with inadequate and unaccredited training and no professional qualifications. How to find out? Maybe the OIA? I appreciate that EQC are gaming the OIA system, and the Office of the Ombudsman seems to have neither the motivation nor the courage to challenge them head-on, however the OIA does provide one means of determining whether your assessment was carried out by a suitably qualified person. Using the OIA it would be reasonable to ask for a copy of the trade and/or professional qualifications held by the person who carried out the assessment(s) on your house. EQC will be tempted to use the privacy sections of the OIA to deny the request, however the whole purpose of trade and professional certification is to provide a public notice that the person awarded the certificate is suitably qualified for the work. Equally important, the whole process is also designed to warn that someone without the trade or professional certification is unfit or even prohibited from carrying out the work. There is no absolute provision under either the OIA or Privacy Act that prevents the disclosure of who carried out an assessment, nor what their formal qualifications and trade or professional certification or accreditations are. EQC and other agencies often seek to protect the privacy of natural persons, however there is no necessity for EQC to withhold the identity of the person who carried out an assessment. Unless someone works for the SIS it is not an offence to make known the name of an employee. As the assessors are carrying out their claimed trade, and in most cases as contractors, there are no compelling individual privacy issues. The assessor may wish to remain anonymous however that is not a compelling reason in itself.  It is an issue of significant public interest to know who is involved in carrying out assessments, especially if in the view of the public there are doubts as to the quality of the work being carried out and/or the calibre of those making the assessments. As a final point, trade and professional certification is a matter of public record (in the public domain) and so would fail the tests required to withhold the information. Of course EQC could claim not to have kept such records, which would be another indicator of their lack of integrity as an organisation. A second option may be available for those who are happy to pour a bit more money down the gaping maw of their solicitor.  Where EQC maintain that a proper assessment was done, but refuse to release specific information, they could be asked to provide a Statutory Declaration to the effect that properly trained and professionally recognised personnel were used in all assessments of the property.  Failure to oblige would be a sure sign of  guilt.

EQC & DBH – deviousness with house floor levels?

Adrian Cowie, Director of Topografo Ltd., has written an article pointing out the inappropriate (incompetent and deceitful?) practices being used by EQC on the basis of the Department of Building and Housing’s less than professional amendment to building guidelines. It is a very interesting article to read. If your house has a sloping floor reading the article is critical.  A link to the article is in the latest CanCERN newsletter, or the article itself can be found on the Rebuild Christchurch website here. For those who wonder about Mr Cowie’s credentials (which are both impressive and substantial), they are listed at the bottom of the CanCERN version of the article here. .

Getting access to the big EQC spread sheet

Remember the spread sheet that was accidently e-mailed out from EQC? Another copy was apparently leaked by an EQC staffer and sent to the blogger known as EQCTruths.

Courtesy of EQCTruths and his/her legal advisers you can now obtain access to your entry on the spread sheet. Read all about it here.

Thank you to the EQC employee who made this available. A brave and decent thing to do.

Wallboard repairs – the problems of inadequate assessments and inadequate repairs

Gib (Winstone Wallboards Ltd) have put their March RE:BUILDING newsletter on the web here. Of most interest for those having their homes repaired is the article REPAIRING DAMAGED HOMES: GET THE STRUCTURE RIGHT FIRST. The short article covers the issue of inadequate damage assessments and the problems that arise from both inadequate assessments and repairs. The article is here. There is a Gib information page here with material on the assessment and repair of earthquake damaged wall and ceilings. .