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House insurance claim – no payout, understand your house insurance policy, the house owner’s risk and avoid having paid for insurance cover that does not exist or paid premiums for an insurer who is unable to process the claim

 

House Insurance Claim

No Payouts, what can you do?

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After more than four years homeowners were still waiting for payouts to insurance claims from the earthquake devastation in Canterbury, September 2010. Or look at Victoria’s bushfires and flood disasters in recent years - devastation can strike anywhere at any time. 

 

God bless you all and time will tell. Insurance issues have been highlights since and unfortunately the changes made to insurance policies won’t change the situations. The insurance industry is a risk management tool, but still the risk remains with the policy holder.

 

 

Home owners are facing two challenges

 

Apart from getting a claim accepted or finding an insurer for properties in high risk areas— home owners facing

· Huge increases in insurance premiums, and

· Major changes of the insurance coverRead the article and comments made to supposed changes to “full replacement cover” based on square meters.

 

Challenges with insurances are;

· Payouts are based on “sum insured” and it is the policy holder’s obligation to set the rebuilt-value

· Insurers do not have social obligations and look after their commercial interests in disastrous situations. 

 

The thing with insurance is - you never know what you might need until it is too late. I have lots of sympathy for people who are in the process of re-building their lives and  battling with house insurance policies. I also would rather not deal with… but what is the alternative?

 

 

 

New house cover policies with "sum insured"

 

The square meter based house insurance with full replacement policy has failed to provide relief in Christchurch and has been deeply flawed. It might be the worst experience to discover having paid for years for insurance cover that does not exist and paid premiums for an insurer who is not able to process the claim.

 

Possibly you have heard about the proposed changes to the insurance industry as a result of the avalanche of insurance claims due to damages to properties by weather extremes, earthquakes and exposure to crime related loss or damage

 

When reading the comments to the article above, people do not like changes and interestingly argue that insurers pass the risk onto home owners. True, the risk has never been with the insurer and stays all the time with the owner. The insurance only provides services for risk management to help out as stated on the policy.

 

 

Overseas insurance companies replaced the obsolete square meter house insurance years ago and it has been difficult to understand why New Zealand has been doing it so long.

 

I have been battling with insurers just from the beginning for transparency of the policy. I wanted to have it in writing that my solar electricity system, my power wind-generator, central heating and so on are covered in the event of an insurance claim.

 

Well equipped housing in different design and used material with insulation, heating systems, double glazing  and features for using renewable energy cannot be insured on a fair replacement value on square meters only. Sum insured and an itemized record of features insured  do actually help you to manage the risks.

 

 

 

Market values—prone to manipulations

 

The commonly used “market values” (based on sales statistics) have been replaced by  replacement values. Yes, there was a time in the past where full replacement cover per square meter has worked when houses were and looked the same.

 

With changing quality (new types of materials) and house design individually it was quite difficult to assess insurance claims on square meter basis.  Insurers assigned a square meter value to it and made their own judgments about values in their own discretion. It would be interesting to know how many homeowners have been screwed.

 

 

Take Away

If the insurance gives the impression offering coverage, but fails to process a claim, what is the point having insurance that does not pay out?

 

That is why changing to “sum insured” to cover housing risk is fantastic news. For reviewing your policy follow these tips to cover your risks. Good luck

 

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earthquake devastation in Canterburyhomeowners were still waiting for payouts to insurance claims