“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.