Sarah O’Brien, spokes person for the Wider Earthquake Communities Action Network, has voiced serious concerns regarding insurance companies who are now suddenly paying out cash settlements to people who are deemed ‘rebuilds’.
It appears the insurers relentlessly disregarded proper independent and thorough costs and engineers reports, which are independently paid for and contracted by victims and are have professionally completed.
I have often viewed cash settlement offers which are void of many basic rebuild costs. It appears insurers initially offer approximately 50% to 70% of what the true value of a rebuild would cost stated Ms O’Brien.
Costs often not included dumping fees of the topsoil, required to be removed to allow excavation and compaction of land underneath the new house paths and driveways. Demolition dumping costs and asbestos removal are also often omitted along with garden sheds, wood sheds and retainers.
I have noticed some insurers only cost for 50% of the foundation costs.
Digging up underground sewerage / storm water and water supply services and their replacement are often missing from the first settlement offers made to victims.
Consent fees, and design fees must be included, along with a 10% preliminary & general cost.
This is NOT acceptable behaviour. Victims are NOT supposed to be the ‘watchkeepers’ of their own claims!!!
It appears the quantity surveyors are being instructed to price and reduce costs by omitting the basics, in what seems to be an effort to save money, resulting in insurers not properly honouring their contractual obligations to their clients ‘to replace or repair to ‘as when new using modern equivalent materials’ and to the NZ Building Standards for homes which are at risk of ongoing seismic events.
The latest trick is to send out cash settlement offers and state that upon accepting the offer, the claimant will have to sign over their EQC land claim.
Challenge your insurers, stating ‘you will contact the Commerce Commission’ as your Land Claim entitlement land claim is with EQC, not your insurer.
Negotiate with your insurer and ensure they meet the ‘true costs of your rebuild.
Ms O’Brien has worked within the design and construction industry for 23 years, and is shocked by the human rights abuse and ongoing avoidance of insurers to meet their contractual obligations to their clients after people have already unduly suffered through 4.5 years of post-earthquake trauma.
‘I became involved with WeCan when I realised that if they are trying to pull one over my eyes, and I understand construction and costings, then what the hell are they doing to the elderly and vulnerable out there’.
Sadly however, in the past two weeks, WeCan have received two notifications of people who after 4.5 years, still do not have functioning water and sewerage facilities on their properties.
The reality is, until the Council admit they have got it terribly wrong, and realise the MBIE Guidance is a far lesser standard than the NZ Building Standards, (a reinstatement level to which we are all insured), this fighting and dishonesty from Insurers will continue.
They are instructing quantity surveyors and engineers to design and price repair strategies to a standard much lower than that of the New Zealand Building Standards require in areas where there is high earthquake risk. This is leaving home owners susceptible to bare the extra costs.
Too many claimants are being tricked into accepting offers of $450 – $500 thousand dollars to rebuild, believing they will have sufficient to rebuild, but once the over cap payment, design and consent fees, contract management fees, demolition removal and dumping costs, land remediation costs, asbestos removal fees and underground services removal and replacement are taken into consideration, people realise they are left with insufficient funds to replace their broken homes.
The average‘rebuild cost’ for a 3 bedroom 120m2 house is approximately $700,000.00 to $800,000.00. The house itself may only be $400k to build, but the subsidiary costs soon add up.
If on TC3 land, the cost is most likely 850k to 900k mark when foundations are properly designed and costed.
Its horrific, states MS O’Brien. After 4.5 years, these people are accepting these lesser payments out of desperation, without getting independent Quantity Surveying or legal advice. To accept a cash settlement people are forced to sign off their insurers’ contractual obligations, only to realise they have been fooled into accepting insufficient monies to rebuild. Their only choice is to then purchase another pre-loved-earthquake-broken-and badly -‘Flectchered’ home.
Ms O’Brien advises claimants to keep a thorough audit trail of all telephone conversations and e-mails. It is essential that those who do not have e-mail access, write down, date and time all conversations with insurers, including the names of those you speak to.
Photocopy all written correspondence before you send it and keep a copy.
Traker mail your letters, and keep the tracking documentation.
Seek legal advice before agreeing or signing any documentation, and get a retired builder or a quantity surveyor to review your pricing or settlement offer. (This will be the best money you will ever spend).
If you have been mistreated by your insurers, or your house has been ‘Fletcher repaired’ and this has not been done properly, you have been bullied, stood over to accept lesser repairs or you are still living in unacceptable, unhealthy, unsafe or dysfunctional living conditions, please fill out a Human Rights Abuse form online.
Click here for the form: www.wecan-nz.com/
Alternatively, write to WECAN P.O.Box 193 Kaiapoi, Christchurch 7644, and we will send you a form.