Canterbury red zone residents – a guide to financial decisions

From CanCERN’s latest newsletter:

The Sorted website CLICK HERE  has a special page for red zone residents, which has a range of tools and information, to help guide you through your financial decisions.   This includes a financial decision guide booklet and an action plan checklist to help get you started with what to think about, and do, and who to talk to.

The website has a wide range links for information on the different aspects of the money side of things. The booklet, which can be downloaded from the link above, covers:
Part one – Deciding on the Government’s offer
  • Which option is best for you?
  • What settlement date suits you?

Part two – Deciding what to do with your settlement payment

  • What to do with the deposit payment?
  • What to do with the final settlement payment you receive?

Part three – Getting advice

  • Who should you talk to?
  • Getting financial advice.
  • Sorted tools and more information

Red Zone FAQ from the NZ Bankers Association

The New Zealand Bankers Association (NZBA) has a web site promoting their activities, and providing generic information about situations faced by bank customers. The web site is here.

The NZBA recently released an FAQ containing information for Residential Red Zone residents, and their lawyers, on the perspective taken by banks on the Government’s Red Zone offer.  Information in the FAQ covers the complications that arise where mortgages are involved (no hard information), contacts in each of the member banks, short answers to questions about how the purchase price deposit will be treated, and what banks will expect of lawyers.

The FAQ can be downloaded in PDF format from here.
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State Insurance: earthquake FAQ – Part 1 (a good read)

State Insurance, part of IAG, have recently placed an earthquake FAQ on their web site.  Someone at State has done a good job in laying out the situation from State’s perspective. As always issues arise and these will be covered separately. If you are insured with State this is the document to read. The FAQ is here.

Even if you are not insured with State this is well worth reading, keeping in mind that other insurers will differ on specifics. It will certainly give you some questions to take to your insurer.

The main topic headings are:

  • How we are prioritising claims
    • 1. How are you prioritising who gets rebuilt first?
    • 2. I’m in Zone A (no land damage) and the government is saying repairs can begin now so why hasn’t mine started?
    • 3. Once the EQC has paid, when will you start my rebuild/repair?
  • Questions about the EQC
  • EQC Zone A
  • EQC Zone B
  • EQC Zone C
    • 1.  Can you assess my home now and at least tell me whether you are going to repair it or rebuild it?
    • 2.  I’m in Zone C and trying to get more information on when my land will be remediated and what the sequence will be – where can I get this?
  • Questions about your policy; excess and settlement options
    • 1. Why do I have to pay an excess for EQC and one to you?
    • 2. My home is a total loss – can I cancel my policy?
    • 3. My home is a total loss – why do I have to continue paying premiums on it?
    • 4. What are my settlement options?
  • Questions about your repair/rebuild
    • 1. My house is being rebuilt – do I have to have everything in the same place? (Lawrence’s comment: this bit covers redesigning parts of the house)
    • 2. Can I move the position of my house on the site?
    • 3. Can I build a smaller home and get the difference in cash? Could I offset the difference in what it would have cost to build the same size against my mortgage?
    • 4. Can I use my own builder?
    • 5. Why can’t I demolish my house now?
    • 6. Can I build a prefab home on another piece of land I own until my land is remediated? Could I then have my prefab home relocated to another piece of land I own?
    • 7. Will I be able to keep things from my existing house that are being replaced, e.g. carpet, drapes, heritage windows etc?
  • Alternative accommodation allowance
    • 1. What happens when my alternative accommodation allowance runs out?
    • 2. Who pays for the removal costs in and out of my property when it comes time for me to have to move out of the house when it is being rebuilt?
    • 3. If I decide to rent a fully furnished property while my house is being rebuilt (and/or it is the only option I can find), who pays the costs to have my furniture stored?
  • Temporary repairs
    • 1. I need to get urgent repairs done to make my home habitable/secure/watertight – shall I go ahead with this? 
    • 2. I want to make some changes to be able to keep living in the house, rather than in temporary accommodation. For instance, could I install a heat pump so I can live there over winter?
  • Garden maintenance at an uninhabitable home
    • 1. I’m not living at my own property – what do I do about my gardens? Will you pay to have my lawns mowed?
    • 2. My policy has a landscaping allowance – can I use this to get the lawns mowed at my property? 
  • Council rates relief
  • Lodging a claim with EQC for an aftershock
  • Payment of EQC settlement to private insurer for repair/rebuild
    • 1. Why am I being asked to pay my EQC money to you now?
    • 2. What happens if I put my EQC money against my mortgage (or paid off my mortgage) and don’t want to take out another loan to pay it to you right now – can I pay you instalments or in full later?
  • EQC Temporary Housing Suburbs
  • This is a very stressful situation for me and my family – where can I go for help?
  • Is there an independent insurance Ombudsman or advocacy service I can talk to?

  The FAQ can be found here.
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Claims management for the Canterbury Earthquake (Detailed)

The material below has been lifted directly from information developed in response to a list of questions from the CCC. It was provided by NZ Earthquake Commission and was correct as at the 24th of Dec 2010. A copy of the full response can be downloaded from here.  

The paragraphs are not numbered in the original but have been here so particular items can be highlighted.

The material details the processes involved in making assessments, and what type of activities may take place. It seems different from what some have encountered and may reflect changes made in light of experience gained in the early assessment period.

Para 5. is key to the issue we have discussed of “what happens if we don’t agree with the EQC assessment?”.  Mention is also made of the EQC complaints procedure so, presumably, it is another avenue for challenging aspects of an assessment. Not mentioned in the paragraph is that, in some circumstances, EQC will refund the cost of an independent expert assessment.

Para 6. mentions that settlement cheques will be sent some time after an assessment is agreed. Some experiences to date have been that the cheque has arrived in advance of notice regarding the settlement.

If any of this information is important please refer to the original document and check to see if there have been any updates.

Start:

1.  Some assessments are fairly straight-forward and will require one site visit or, in cases of minor damage, a phone call and/or the filling out of a form.

2.  In the case of all but minor building damage and most contents claims, a loss adjuster and an estimator will spend some time at the home looking at every room, at roof spaces, roofs, walls, outbuildings and so forth. Once this has been done, they will provide a damage assessment, and ask the owner to sign a Statement of Claim (SOC). A SOC is a list of the damage.

3.  At the same time the assessors will take notes for a Scope of Works (SOW). The cost of repairs will be based on this document. In some cases the assessment of damage and the estimate of costs can be done at the end of the visit and the owner is given a letter about this at the time. If not, the letter will be sent once the work has been concluded.

4.  Once the loss adjuster and the estimator have visited, and, given agreement from the owner, the claim will be transferred to the EQC payment system.

5.  In some cases, it may take more than one visit by a loss adjustor and an estimator and perhaps an engineer and a valuer as well. Sometimes the owners will not agree with an assessment and EQC will usually look at the matter again. Owners are free to call in their own experts and EQC will look at the reports provided. EQC has a complaints and disputes resolution processes in place to address owners’ concerns.

6.  Once an assessment is agreed, what happens next with the payment depends on the nature and value of the damage:

  • for all claims under $10,000 (except for structural and/or chimney damage) and all contents claims up to EQC’s limit of $20,000 plus GST, owners will be sent a cheque and some documentation including a copy of your SOC
  • building claims of approximately $10,000 to $100,000 + GST range are being referred to our project manager, Fletcher Construction, and EQC will pay them once the repairs are carried out
  • where a building claim is estimated as in excess of the maximum allowed to be paid by EQC i.e. $100,000 + GST, then what happens to the payment depends on whether the owner has a mortgage. Those with a mortgage will have their money paid to their mortgagee. Those without a mortgage will have the $100,000 paid directly to them
  • if the money is paid to the mortgagee, then what happens with the money will depend on individual circumstances. The main banks have said that typically they expect to use the money to repay lending and then work with customers in relation to any new lending and repair and rebuilding activity.
7.  Once owners have been advised that a settlement cheque will be sent, this could take at least two weeks and sometimes longer simply because of the volume of payments that need to be made.

End