Dealing with the aftermath

When the heavens opened above the land of the long white cloud earlier this year, it devastated thousands of lives. 

The North Island floods of late January and early February and the damaging Cyclone Gabrielle just days later not only had New Zealanders filing tens of thousands of insurance claims, but reframed how the country deals with natural disasters.

The Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) has welcomed the establishment of a New Zealand Claims Resolution Service, saying it will augment a first-line response to natural disasters and help homeowners through increasingly frequent extreme weather events and extreme weather-driven insurance claims.

ICNZ Chief Executive Tim Grafton says the service provides free and independent insurance-related advice to people at what is a very stressful time.

When making a claim, individual insurers are still the first point of contact and even after major events most claims are settled smoothly, Tim says. But the claims resolution service can be used when there is a more complex claim, to help prevent misunderstandings and unnecessary delays in settling claims.

AA Insurance knows from experience that the most important thing insurers can do when disaster strikes is be there for customers when they need them. Like most Kiwis, the company’s claims teams were watching the weather forecasts closely in the lead-up to these events – and the call was put out early to rally all hands on deck to help thousands of customers lodge insurance claims over the phone or online. 

AA Insurance Chief Executive Michelle James says the company received close to 3,000 claims in the first two days of Auckland Anniversary weekend after the major flooding, with claim numbers continuing to rise over the following weeks. For comparison, claim volumes for an average weekend in January typically total 520 nationwide. 

“In this first phase of every major event response, our priority is to ensure customers can contact us quickly for advice and support in what can be a very stressful and confusing time. This guidance is especially important for customers who have flood damage in their home and need to sort out emergency accommodation or cash to cover necessities. It is also critical for health and safety, as our teams often help customers with advice around removing contaminated belongings from their homes – the types of things that can be easily forgotten when you’re running on adrenaline,” she says.

After the Auckland Anniversary floods, AA Insurance’s motor team moved quickly to help the many hundreds of customers whose vehicles were damaged.

Michelle says, “We know that losing a vehicle can impact heavily on our customers’ lives – disrupting their ability to get to work, drop kids off at school or childcare, and other family commitments. We also know that once water reaches a certain level, a car’s electronics could stop working at any time and the last thing anyone needs is for their car to break down when they are halfway down the motorway. That is why we moved quickly to write off flood damaged vehicles and get money into our customers’ hands.” 

Within two weeks of the Auckland Anniversary floods, around 75% of AA Insurance’s motor customers had their motor claim sorted.

AA Insurance has also scaled-up its claims management capability in its home insurance team to assess damage to property and support customers to rebuild damaged homes as quickly as possible. It has also supported property owners whose tenants have needed to find alternative accommodation due to the flooding, through the loss of rent cover in their landlord policy. Michelle stresses the importance of contents insurance for tenants as it can be surprising how quickly the value of your belongings can add up. Needing to replace them suddenly and all at once can set people back if they don’t have the safety net of contents cover.

With billions of dollars’ worth of assets lost in the latest weather events, and billions more to be spent in the ensuing clean up and rebuild, some insurance experts are calling for New Zealand insurers to take floods as seriously as they do earthquakes. 

In an Insurance Business NZ article, Finity consultant and actuary Emma Vitz said that while New Zealand has become expert at managing earthquake risk, there hasn’t been a similar focus on flooding and other climate change-related catastrophes.

“It’s time to take flooding as seriously as some of the other perils we have a lot of experience with in New Zealand,” she says. 

Does every cloud – even those created amid the most devastating of storms – really have a silver lining? Emma thinks so, with the opportunity to rebuild houses and infrastructure smarter and stronger.  

“In that way, we can move towards a situation where people are safe – which is obviously the most important thing – but they’re also able to purchase insurance and keep that cover,” she says. 

Find out more about insurance while you're here: 

• Explore the different policy types available at AA Insurance
• Why you should adjust your insurance policies when life changes
• What to look for in an income protection policy