An insurance lawyer is rubbishing the Earthquake Commission's new disaster response model, saying it reinforces a power imbalance.
Instead of dealing with EQC as well as an insurer, customers will now deal directly with their insurer for all future claims.
Advocates say it is like David vs Goliath as the commission and insurers are now acting together.
EQC's new model is being touted as a customer-first approach for victims of natural disasters.
It came into effect last week after a public inquiry into EQC in 2020 following the Canterbury Earthquakes, in which it was criticised for arrogance, bullying tactics and treating people poorly.
EQC said the new model puts people first, and removes the pressure of dealing with both a private insurer and EQC for claims.
But Wellington barrister John Goddard is critical of the new model, as homeowners will only have the option of cash settlements.
"The concern about that is that, if settlement is full and final and there is not enough money to pay for repairs, the repairs will not be carried out or will not be carried out in full. And the outcome of that is the quality of the housing stock is devalued," he said.
Goddard said people should have the choice of an EQC-managed home repair, similar to the programme run after the Canterbury earthquakes.
He said people are not being put first, particularly with the private insurer being the single point of contact for claimants.
"By pooling the resources with EQC and private insurers, the imbalance of power between insurers and EQC on the one hand and homeowners on the other appears to have been escalated."
EQC chief executive Sid Miller said it's not a power imbalance as there are checks and balances to ensure a fair process.
"There is an assurance framework in place whereby EQC will audit each of the private insurers in terms of how they are settling claims against the EQC Act. And we've got a full set of processes and guidelines in place to deal with that," he said.
In response to the concerns about cash settlements being the only option, Miller said that is the norm in the insurance industry across the world.
He said vulnerable people who can't deal with the insurance process on their own will be looked after by EQC.
But any future managed repair programme is a decision that the government will have to make.
"EQC nor the insurers have the skills and capability to run large scale construction projects. That is the building industry."
Christchurch-based insurance advocate Dean Lester said insurance always involves a power imbalance.
He said more work should be done to educate homeowners.
"One of the key things of Dame Silvia's report [public inquiry] was, how does the homeowner become empowered and obtain sufficient knowledge to have a balanced and good discussion. That's something that EQC needs to consider to work on."
EQC said the new model addresses 24 of the 69 recommendations from the public inquiry.
It said it's committed to implementing all the recommendations its responsible for, and is well advanced on the work.