What you need to know if your home has been affected by extreme weather events
We’ve been dealt some tough blows in 2023 so far. Floods, cyclone damage, rising interest rates, pressure on the renovation sector. If you’ve been impacted by the floods and cyclone – or both – then you might be navigating an insurance claim at the moment. Here’s what you can expect, plus tips to make sure you get the best outcome.
The difference between EQC and EQCover
Toka Tū Ake EQC stands for Earthquake Commission, which provides insurance called ‘EQCover’ for natural disasters via private home insurance companies. It can do this because when you take out private house insurance, part of the cost includes a levy that is paid into the Natural Disaster Fund, which is what’s used to pay out EQCover claims. What that means is, if you’re impacted
by a natural disaster, your claim still goes through your house insurance provider, but EQCover contributes towards the cost of your claim less a small excess.
How are claims assessed?
Each insurance provider will have their own way of processing claims. Depending on the magnitude of the likely claim – for example whether your whole house needs rebuilding, stripping out and renovating, or whether the damage is contained to one area, such as your kitchen or a bedroom – will depend on whether they send out an assessor, or leave you to collate information yourself.
What are the risks?
There are always factors that haven’t been considered when renovating a home, or poorly scoped projects that subsequently lead to budget blowouts, delays or disappointment. Despite this, under normal circumstances you have time to adequately plan and prepare – to work through the risks and account for them in your renovation budget; but when you’re thrust into a renovation unexpectedly due to weather damage, there’s more of a rush to get repairs underway.
Currently, a lot of homes are being stripped out – floor coverings uplifted, plasterboard removed from walls, furniture thrown away. This is great for drying out homes, treating them for mould, and figuring out what is salvageable but it’s being done without a clear plan for what happens next, which leaves homeowners open to budget blowouts they shouldn’t have to cover.
What to do
It’s likely your insurer will give you two options beyond this point: let them organise the repairs or take a cash settlement and organise it yourself – depending on your sum insured. With insurance companies having a limited list of approved contractors, it’s possible it will be quicker for homeowners to take it on themselves.
In either scenario it’s important that all the scope is captured, but especially for the latter. The last thing homeowners want is to be caught short with what their insurance company pays out versus what the remedials actually end up costing, excluding any upgrades homeowners choose to implement at their cost along the way.
The best way to mitigate this is to stop and take a step back instead of rushing ahead to get the repairs done without fully understanding the work required. Consider having your insurance assessor’s report peer reviewed – this could be by a quantity surveyor, through obtaining quotes from contractors, or via a renovation expert who can identify the risk areas for additional cost that your insurance provider might not have factored in.
Words by: Jen Jones
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