13 Apr 2012

Quake minister defends insurance industry response

10:04 pm on 13 April 2012

Earthquake Recovery Minister Gerry Brownlee says he is happy with the way the insurance industry has conducted itself in response to the Canterbury quakes.

The minister and the Insurance Council deny that any lobbying took place over a relaxation of building guidelines for quake-damaged houses in the region.


In 2011, the Department of Building and Housing loosened the guidelines so that big cracks and tilts in foundations previously deemed irreparable can be fixed.

One Christchurch resident believes that is a result of pressure from insurers, as it means smaller payouts on quake-damaged houses.

But Mr Brownlee says the department got it wrong when it set the original specifications and had to change them, as they were far too onerous.

He says under the specifications, hundreds of houses throughout New Zealand would have had to have been demolished - which is why they were changed - and it was not as a result of lobbying by the insurance industry.

Mr Brownlee is MP for the Christchurch electorate of Ilam and says the Government meets frequently with insurers to ensure agreements are honoured.

"I think they've engaged very, very well and ... naturally you're going to have your disappointments.

"I'm a homeowner and a claimant myself, so I understand a lot of that frustration. But I can also see the very big problem that sits out there for the whole of New Zealand if we don't get this right."

More generally, Mr Brownlee says he is happy with the way the insurance industry is conducting itself in Christchurch.

The Insurance Council says it put no pressure on the Government to make any changes. Chief executive Chris Ryan says the Government and other agencies have acted professionally.

"The Insurance Council has not lobbied the Government on this matter. In fact, we've not lobbied the Government on any matter strongly, except to say we all need to get the rebuild done as quickly as possible.

"We believe that since the initial earthquake on September 4 (2010), there's been a constant struggle to keep up with changing data and changing conditions of the soil and speed up a rebuild."

The Insurance Council says it is not in the industry's best interests to employ delaying tactics in Christchurch, as the cost of rebuilding or replacing homes becomes more expensive as time goes on.