First there were several people who had inadequate insurance in Christchurch. I have no idea what the situation is in Japan, but I understand that some of the worst hit were apparently poor communities illustrated by the ease with which the tsunami washed away the houses.
I think the first thing goes back to my previous blogs on preparation lessons, the aftermath and getting your household ready. The Earthquake Commission is there to help after a natural disaster which isn’t covered by normal household insurance. But the scope was huge. They had over 440,000 claims and even in dealing with those, their liability is up to a maximum of $100,000 for dwellings and $20,000 for personal property. Try building a house for $100,000 or replacing even your basic possessions including appliances, furniture, clothing etc for $20,000. Some people will pretty much walk away with nothing.
Now insurance itself is a risk game and they take our premiums on the expectation that for a large number of people they will never have to pay out. Now I haven’t seen the financials for EQC, but I suspect that most of the money has gone into running the organisation over the years, especially given that after the event John Key says that the government may have to treble the levy in our taxes for future incidents. Does this mean that we are now going to start to pay for what happened, borrowing from the future because the funds weren’t there? Are wee robbing Peter to pay Paul?
We always knew a major disaster looming. Of course we thought it was most likely to happen in Wellington. It hasn’t, which of course doesn’t mean it won’t because Christchurch and Wellington are on different fault lines. But I would have thought with years and years of taxes and no major incidents, EQC would have been flush with funds.
Anyway, back to the present. If you don’t have adequate insurance to cover everything, think again and do what you can, even if money is tight, things could get a whole lot worse. I hate insurance. I was once asked to do a whole lot of psych tests by an insurance company who thought I would be a star life sales person. The idea of selling life policies to my friends was anathema but I loved tests, so I spent a whole day doing the tests and they came back apparently saying I would be hugely successful. I declined despite the offer of a big package. Today I wonder if I should have taken the money, because I better appreciate the importance of insurance. It’s a gamble by both parties, both hoping we will never be in a position to need the cover.
I have life, income protection, health, car, house and contents policies and it eats up a lot of money. So far the insurance companies have enjoyed a lot of meals from my table, but if something major did happen, I feel secure that if my company closed for 6 months because its buildings ceased to exist, if I was injured or ill long term, or if my house washed away in a tsunami, I could rebuild. As the Dean of Christchurch Cathedral said, its the people that matter, the church can be rebuilt.
One concern I had with the aftermath was seeing people throw away their household appliances, carpets, furniture etc and wondering how they would be able to prove what they had lost. The share scale meant that many people had to do that, but it does show the value of having a list of your possessions and also photos. I once had a software app that did that, but never fully used it. Another thing to my be prepared list methinks.
So I recommend you grab a digital camera or video camera at least, so that you can go through each room and record your possessions and the state of your property, so that you will have proof in the unlikely event that you could need it. Then store the information somewhere safe. I used to keep my songs in safe deposit on video, with the bank, some people thought I was stupid, but again its just insurance.
Enough for now. I hope I’ve given you some more food for thought. Here’s some fond memories of mine of Christchurch a couple of years ago, with a song I am still writing.
I just watched Campbell Live about EQC’s performance and the major discrepancies between their assessment of damage and assessments made by other insurance companies. It is horrendous. The CEO of EQC says they have only had around 300 complaints out of way over 130,000 assessments and that was before the second quake. I hope they are right otherwise we could see people (and rightly so) taking out a class action against EQC. We pay a levy to these guys all our working lives. I just hope that the 300 is fair and accurate and they will get sorted. Not sure I believe them though. If you haven’t seen the program I’m sure it will be up on the website soon. http://www.3news.co.nz/TVShows/CampbellLive/Home.aspx