Author Katrina Shanks, CEO Financial Advice NZ Article originally published in Stuff.co.nz.
OPINION: The weather bomb has struck parts of our country with a determination to cause loss and damage to both people and property. It has been relentless and has made our people and communities vulnerable.
Much of the rest of New Zealand has been able to only stand by and watch, though there has been great support from outside the affected region in the form of donations to food banks and community centres, and search and rescue personnel and building inspectors to help over-stretched locals. Our hearts go out to those affected.
Hopefully, there will be no repeat – certainly not any time soon, and hopefully ever – of the “atmospheric rivers” that hit twice within five days, and the clean-up can begin in earnest.
But as that happens over coming days and weeks, further sobering news is surfacing from the dirty waters: insurance analysts have estimated that judging on claims made to the major insurance companies after the first downfall, but before the second, there could eventually be more than 30,000 claims totalling around $1 billion.
That would make it the most expensive natural disaster since the 2016 Kaikoura earthquakes, which cost $2.27b, according to Insurance Council data.
And though that will be taken care of for the most part by insurance company payouts – after all, that’s why we pay those premiums in the first place – there is a serious downside to it.
For one thing, such huge insurance claims are nearly always followed by higher premiums in the following year or so as the companies endeavour to recover some of that cost and look to guard against similar events in the future as climate change bites.
For another thing, homeowners and businesses in what may now be regarded as flood-prone areas could now find it much harder to get flood insurance cover. And even if they can get it, their premiums could be so high as to make it unaffordable.
Insurance brokers, insurers, and insurance advisers are being run off their feet and that will continue for the foreseeable future. But rest assured, at times like these they will be triaging claims based on their urgency and prioritising customers who need any extra care because of a health condition, disability, living situation, or age. If that’s not you, be patient – they will get to you.
In the case of advisers, they will be in contact with their clients and offering any help they can to start the claims process.
So, what is that process and how can you best make it work for you or speed it up if you have been affected, or are in coming days?
The golden rule is to contact your broker or insurer as early as you can, especially if you need to arrange emergency accommodation or repairs. Only when a claim has been lodged can insurers start to deal with it.
If you don’t have a broker, the quickest and easiest way to lodge a claim is through your insurer’s website.
In the meantime, if flood water has been through your property or vehicle, treat it as contaminated.
To help speed up the assessment and claims process, you should take lots of photographs: of perishables, carpets, and soft furnishings that have been underwater, and may pose a health risk, before you throw them away, as well as other damaged property.
It may be helpful to your insurer if you also mark and take a photograph of where the flood water reached its highest on your property.
If you have a broker who takes care of your insurance, the best way to help speed up a claim is to make sure they have all the information they need to fill in the forms.
There are other things that can help streamline your claim:
- – Supply as much detail about the claim as possible. This will help the company assess the situation faster. One-word descriptions such as “flood” slows things down because the claims handler needs to understand exactly what’s happened and the extent of the damage.
- – Supply proof of purchase of goods where you can.
- – Some house and content policies come with a temporary accommodation clause, which means if your house is uninhabitable as a result of the flooding, you may be eligible for a benefit and be able to get an emergency accommodation payment. Check this with your broker or insurer.
- – Current house insurance policies provide EQC cover, which means you can make a claim for land damage caused by flooding or landslips, or if your house is damaged because of it. Your broker or insurer will manage these claims for you.
- – If the flooding or water damage is causing you financial hardship, your insurance company may be able to help with an emergency payment, so don’t hesitate to tell them. Most will offer this on a case-by-case basis.
- – If you’re one of the thousands of people whose vehicles have been underwater or otherwise damaged due to floodwaters, it’s advisable you don’t try to start or drive it till you have checked with your broker or insurer. This could cause further damage and void your claim.
- – If you have chosen the rental car optional policy benefit as part of your policy, you may be eligible for rental car cover for loss of use. Check this out and talk to your broker or insurance company.
It’s important we learn from events such as these, to see if we can be better prepared next time. If you’ve been caught with no insurance or not enough, then it’s advisable to review this as soon as possible.
If you’re unsure about what you need, talk to an insurance adviser, who will be able to advise on options that suit you. The good news is this won’t cost you – advisers are paid by whichever company you decide to take your policy out with.
In our household we are insured, and this year we’re reviewing our policies to make sure they are still fit for purpose, especially our content insurance, which I have a sneaking suspicion we are most probably under-insured where we have made changes like shutters to windows and adding built-in wardrobes.
As my financial adviser would say – don’t treat insurance as a cost, treat is as an investment in protecting your future.