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safety reasons on the Christchurch central business
district. This saw large parts of the city out of bounds
to all customers, owners, insurers, and adjusters,
and also affected the ability of the insurance sector to
ascertain the value and status of claims. The cordon
also imposed difficulties on insurers and businesses in
terms of Business Interruption policies including the
generally accepted 12-month indemnity period for many
businesses. While insurers worked hard to overcome
these difficulties, there was a lack of understanding
that this was something outside of the control of the
insurance sector.
Our building codes will change, the way
we live in our cities will change, but we
will still be New Zealanders and our
nation will continue to prosper and grow
thanks to high levels of insurance taken
out by prudent Kiwis.
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Significant levels of under-insurance were exposed,
particularly in the commercial sector, and a key driver
of this was outdated valuations on the properties being
insured. A very large number of people are choosing
cash settlements on their claims due to the continuing
aftershocks and uncertainty about ground conditions,
and the ability to rebuild within a set period of time.
This prompted a degree of concern by authorities with
capital leaving the Canterbury region and being invested
elsewhere instead of in the rebuild.
Significant work was undertaken with the business
community to establish their concerns and relate the
insurance responsibilities back to them as customers.
However there are now, looking forward, extensive
considerations for the future. The first is to establish the
status of the land and then begin the rebuild which is
expected to require at least 30,000 additional workers.
In terms of future considerations for the Insurance
Council, issues of insurability will now be very high in
the minds of insurers with many unreinforced and early