We should legislate against insurance industry rip-off in Christchurch

Over at Frogblog, frog highlights a serious problem, initially identified by Christchurch resident and blogger David Hayward, with the insurance industry’s approach to the Christchurch earthquakes:

“Tower Insurance maintain that the house is not a write-off.  They maintain that they are only obliged to repair the house — not to honour our insurance policy for total replacement.  They say that just because we won’t be allowed to live on the land, and that the house will be bulldozed, doesn’t mean that the house is an insurance write-off.  Sorry, they say, but what the government mandates with regard to land is nothing to do with them.”

I  had hoped my fellow blogger David’s problems were a one-off, and someone at Tower Insurance had made a mistake.  But that is clearly not the case.  Tonight’s Campbell Live reveals this is a widespread approach by the insurance industry – if a house can be repaired, but the Government has deemed the land to be unsuitable for housing, insurance companies will pay only the repair costs, rather than the replacement costs, even though the house will have to be demolished anyway.

How about the Government legislating to close off this loophole for insurance companies.  Or do we want to see Christchurch homeowners whose properties are obviously unrepairable having to expend all they have left in a protracted fight with their insurers? 

Insurance companies should be good corporate citizens, but they are revealing themselves as using every possible loophole to rip off the most vulnerable – people whose lives have already been devastated by the Christchurch earthquakes and didn’t think things could get any worse.

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4 thoughts on “We should legislate against insurance industry rip-off in Christchurch

  1. Insurance companies must be named and shamed on a daily basis as well as being legislated against for copping out of their obligations to quake victims in Christchurch.
    The government should have seen the possibility of this problem occurring, it’s their absolute responsibility to rectify the situation as soon as possible.

  2. Private home owners weren’t given much of an option after the Insurance companies were finished, and it’s sad that they will have to walk away from their damaged properties with huge losses. This situation should send out alarm bells to all New Zealanders, can you trust your Insurance company to stand by you and do the just and moral deed?

  3. Now that we are into February 2012, the insurance companies are showing their true colours. Vero is one of the worst, but they are all just plain nasty.
    I know of several families who went by the book and faithfully paid huge insurance premiums, and will not get answers for another 18 months to 2 years.

    In that time they will run out of money for rent, mortgage repayments, and general living costs.
    By 12 months they will have to walk away from formerly beautiful homes and jobs, and re-locate to start a new life from scratch in Australia or other places.

    So much for a caring business and Govt community.

  4. Hey would you mind stating which blog platform you’re using? I’m looking to start my own blog
    in the near future but I’m having a tough time selecting between BlogEngine/Wordpress/B2evolution and Drupal. The reason I ask is because your layout seems different then most blogs and I’m looking for something completely unique.
    P.S Apologies for getting off-topic but I had to ask!

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