The Insurance Aftermath of an Earthquake

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.

 

Household devastation after the earthquake

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.

 

Preparation Lessons from Japan and Christchurch

It’ll never happen to me is probably the first thing. Even in Japan, which I have visited at least 20 times, I doubt many people expected anything like this latest earthquake. I experienced earthquakes on many of my trips to Japan. I have been in office buildings and hotel rooms and felt the vertigo as buildings sway. The thing is it happens so often that people take it in their stride and the evidence was seen with images of people standing on bridges watching rather than racing for cover.

A similar situation occurred in Christchurch, New Zealand. We all expected that if a big one did come, it would be in Wellington, not Christchurch. I used to be a Civil Defence rescue team leader and our earthquake training was all based around Wellington because it has a compact CBD, lots of buildings clad in glass and sits right on the fault line. Like Japan, they experience lots of earthquakes there.

What I really wanted to mention in this blog though, is the survival kits, the essentials required besides shelter and ablutions. That is water and power. Water has proven to be probably the biggest issue in many fronts. Basically water is the most crucial element. We can live longer without food, but not without water. We need water for drinking, bathing, cooking etc and when the water supply either fails or becomes contaminated, this becomes a major problem.

I will certainly be taking this more seriously in future because it was obvious that if you didn’t have any, your chances of getting your hands on water were pretty slim. In Christchurch for example, only one supermarket remained open. Not a lot for New Zealand’s 2nd largest city.

If you don’t have electricity, you can’t boil contaminated water, can’t wash yourself, your clothes and risk hygiene problems. A generator isn’t much of an option but gas is. We saw lots of images of people filling up their gas cylinders and having communal BBq’s because their refrigerators couldn’t run and food would soon perish.

Getting gas after the quake

Of course gas also means you can boil water. We were very lucky in Christchurch to not have outbreaks of cholera or other diseases due to water contamination, not to mention the inability to flush the toilets etc.

In this situation I’m not sure how much it would help, but these are easy things that I will be doing to ensure even though I don’t think it will ever happen to me:

• Stocking enough water and non perishable food to support my family for a number of days.
• Ensuring that I have a couple of full gas cylinders (remember that without power, petrol stations close)

Longer term I will look at replacing my hot water cylinder with gas. Doesn’t help if there is no water, but does if there is no electricity.

Then I get back to my hobby horse of solar power. A hobby horse of mine is that the government should not only be encouraging us, but facilitating solar power for both business and consumers. I’ve blogged before about feed-in tariffs and interest free finance for people to install solar panels as happens in other parts of the world. If we all had solar power, we would be much more sustainable. Obviously New Zealand will not be running nuclear power, even more so given the latest catastrophe in Japan. As I write this a 3rd nuclear reactor has lost its emergency cooling system after the 8.9 quake!

For a country that asserts itself as clean and green, I think this is a big fail. Maybe this would be an opportunity for the Green Party to assert itself. With the election due in November this year, if I was them I would be pushing hard for interest free subsidies for solar energy, especially for water heating. I would also be pushing for the right to sell surplus energy back into the grid .

When I was in the Netherlands a couple of years ago I saw many warehouses and farm buildings covered in solar panels. I also of course saw many wind farms. I thought they looked really cool, although I probably wouldn’t want one in my backyard. Fortunately for the size of our country we have plenty of space.

So have we learned anything and will we act on it?

The following video illustrates how people are so used to earthquakes that they don’t do what they have been trained to do.