Saturday, October 5, 2013

YOU DON'T SAY!!!



Martin van Beynen writes in The Press, "Tremors exposed Earth Quake Commission."


"The Earthquake Commission (EQC) planned poorly for a major catastrophe and therefor lacked the leadership and systems needed to cope with the Canterbury earthquakes."


No shit Sherlock but thankyou Martin for the first of many documented exposes as to how inadequate the EQC model as it existed on September the 4th 2010 was, in the harsh real world of insurance.

At present we here, are in the throws of finally getting the damage from over three years ago addressed in realtime.
No more inspections, assessments, scoping reports, bullshitting, buckpassing, except the ongoing need for "variations" (now is that a euphemism or what) as the restoration in progress, exposes further, previously obscured problems, a system that  is threatening the sanity of our 'preferred contractor' as he struggles to cope with the total bullshit systems that EQC and their agents at Fletchers hubs create endlessly.

Nothing, absolutely nothing, as we progress what I consider would have taken Lumley, our private insurer, who have been so professional, understanding, compassionate, prompt and fair, no more than a month at the outside, to reinstate our home, is anything other than a total mishmash of incompetence as EQC and their proxy Fletchers deal to the disaster aftermath.

Initial inspection by a retired Policeman (I understand as a filter for fraud) and a youth fresh out of Polytech,  two years after the Sept event that perpetrated all our damage.
Then after my getting a little exercised watching 2nd, 3rd and in one case a 4th home getting repaired while the patient pensioners, in the full knowledge that there were many worse off than us, were being ignored, as "the squeaky hinge syndrome made progress for some".

Finally after swmbo was diagnosed with a degenerative neurological condition that was markedly worsened by stress I/We ceased being Mr and Mrs Nice and commenced a SHS campaign on our own behalf, and snailpaced progress started.

We got "scoped" then our preferred party started pricing on the scope.
The scope was made on visible evidence but even then there was no recognition of certain outcomes that a tenyear old girl would work out.
(a) no allowance for replacing waterproofing for an existing wheelchair shower/toilet en suite following tile removal.
(b) no allowance for reinstatement of U/F heating nets under tiles in bathrooms that were destroyed when tiles were removed with electric impact hammers.
(c) no allowance for where a 7mm crack in the foundation headed for a second en suite, under the shower, past a toilet and on through a wardrobe and the bedroom floor to the outside wall.
(d) no acceptance or recognition that the Tiled wall in the Wet area of the wheelchair en suite would be damaged by the floortile removal, plus the need to take the waterproofing up the framing and exposure of the heating circuit controllers.
(e) the need for pricing for the disconnection of the U/F heating panels and reinstatement.
(f) the plumber to disconnect and seal water faucets on vanities, reinstatement, removal and reinstatement of Toilets on floors being retiled.
(g) removal of vinyl in kitchen(approved) revealed three cracks requiring epoxy filling. Three matching grooves in the damaged vinyl clearly obvious.
(h) lifting of carpets adjacent to kitchen cracks to assess further damage.

That list of "variations" all had to be scoped, priced and approved by the Fletchers/EQC Nabobs, not all completed at present,  while we have had repairs underway for over one month.
As my builder commented if he ran his business in that chaotic way he would be out of business in two months.

I know there are many out there who were in dire straits and have been sorted, they were often the simple claims often writeoffs, and many worse off for damage are waiting but three years on if EQC was subject to the constraints of the insurance council they would be in court everyday for poor response times and settlements.

I have posted before that the EQC model will never be equipped to deal with a disaster such as quake Sept 4th 2010, followed by February 22nd, June 13th and aftershocks centered on Christmas day, all in 2011, among the over ten thousand "events"
Even if it had been left to private insurers,  as I contend it should, they would have struggled admittedly, but they have systems, staff and assessment protocols in place, fraud filters and management in situ to quickly respond and in most cases a support base from outside the disaster area to call in.
EQC had office staff collecting and investing compulsory premium addons and should have been morphed into a reinsurance role within the 100k/20k parameters and waited for the processed claims from the private insurers to come to them for assessment and settlement.

The Quakes are for now reduced, nerves are still frayed, incompetence is still in play and Martin Van Beynen has only scratched the surface.
There will be many more stories to come, particularly around padding, false invoicing, conspiracy to defraud, backhanders and general incompetence. Then there will be substandard work disputes.

As yet I have seen precious little resolve from the Government and the bureaucracy to address Van Beynens highlighted revelations, but I venture to suggest "you aint seen nothing yet"


8 comments:

David said...

Good to see you are making some progress. I am under cap for the first one and not sure about the second one, not sure if they are treated as two separate under cap or one over cap because they can't disclose that to me. State came round to look at the drive and there and then said we will fix it or give you a cheque with a dollar value.
EQC are beyond hopeless, 3 years in either give me cheque and let me repair my own house or tell me it's over and Fletchers will fix it.
I am looking after repairs for a widowed relation and the EQC f...wit declared her house leaky before he crossed the threshold so they won't touch it or pay for the outside repairs. It's not leaky and we have spent thousands on engineers reports to confirm it but they won't budge.

Paulus said...

Sadly EQC handling of this was a shambles.
Having had a professional relation ship to EQC and its staff for many years, it is fair to say that virtually nowhere in the World would any organisation have been able to handle something like 400,000 claims from one event.
If EQC has spent money on this kind of readiness somebody would have bitched.
For years EQC has been a political pawn played by successive governments subject the whims and wishes of Treasury and Cabinets.
That it is a first loss policy was a subject of much discussion some years ago, with the suggestion that the Insurance Companies handled all the losses, with EQC coming to second with the insurers in the lead role.
Treasury wanted to keep the money and the Investments away from EQC.
The Insurance companies did not like it as it would not allow them to blame EQC in any EQ event.
EQC is under serious peer review at present but it will take time to
develop their role - if they any longer have one - possibly not but Treasury must get the investment capital back ($6,000,000,000) that has been depleted from EQC and their International Reinsurers.

It is fair to say that International Reinsurers are very displeased with New Zealand at the size of loss from Christchurch as the commercial aggregate liability totals for this were far exceeded that they were regularly told.
Whilst they are still backing EQC and the Insurance Companies at present the pressure for return to financial stabilisation will take many years of higher premiums for Insurance in New Zealand will continue.
EQC - well a number of ideas are being muted - again to second loss as was discussed many years ago, which if done would not have had the implications we now see.

Tinman said...

Had a fantastic run with EQC.

Property was inspected very quickly, remedial work (done privately) was completed quickly, quietly and efficiently.

Great organisation, great people.

gravedodger said...

@ Paulus, thanks for the comment, great input .

Do you think the claims process would have been more efficient, notwithstanding still formidable, if primary lodging and initial processing was in the hands of the insurance companies instead of trying to set up EQC as a point of first contact.

@ Tinman, I am very pleased for you, many are not so fortunate.
For many precarious is more appropriate.

Anonymous said...

I too have had a professional relationship with EQC for many years.

Now that the fund that started in the 1940's has been fully expended there is no further role for EQC. Leave it to the insurers who access the same reinsurance markets as EQC.

At this stage I can't see any benefit that EQC adds, apart from funding earthquake related research, but that can be handled just as adequately by other arms of government.

Paranormal

Paulus said...

Gravedodger and Anon

It is difficult to answer your question as to whether the Insurance Companies would have handled claims better, as without much preparation over years they would not be prepared enough.
In times past there was an agreement with State Insurance that they would be immediately seconded to EQC to assist. But Labour sold off EQC so that was it.
So yes - it may have been a better point of entry but I do not know. Good point though.
To Anon's point - Government (Treasury)want their money back, so they will continue to claw back as much as possible, as quickly as possible, as another EQ could occur any time - yes even Christchurch again.
Like wise Reinsurers, whether from EQC or the Insurance companies who gave incorrect underwriting information from the insurance companies.
AMI was a prime example of using inaccurate figures and ignoring DSIR and others advice on liquefaction. The Council put these reports under the desk and ignored the implications. Why ever the Council allowed these "liquefaction" estates to be built, other than rates and money.
Could only happen in Wellington - never Christchurch they probably believed.

Paulus said...

Sorry - Labour sold off State Insurance to the Poms who stripped it and resold it to the Aussies

Paranormal said...

Paulus

"Government want their money back" And therein lies the rub. It was never their money but EQC were used as a political football for too long. That's another reason why EQC has to be disbanded and given back to the insurance specialists.

I was also involved with AMI. They consistently undercharged for their insurance which allowed them a greater market share - and consequently large aggregate exposure. Having said that they purchased catastrophe reinsurance to levels recommended by specialists. AMI just had no prudential safety margins built in and an ego that thought he was gods gift to insurance running the show.

As for the insurance industry coping with that level of claims - that's what they prepare for. I recall a presentation from the largest US insurer State Farm on how they managed the claims from Hurricane Andrew. There was one memorable picture of the sheer volume of paperwork involved. They had archived the claims in a disused hangar the stacked paper was three storeys high and dwarfed the people standing next to it.

As for the reinsurers getting their money back - that will still happen if EQC is disbanded. Ultimately the New Zealand home owner will pay reinsurers, either via EQC or via an insurer.