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EQC cut contents cover, hikes levy

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  • EQC cut contents cover, hikes levy

    EQC cut contents cover, hikes levy

    JOHN HARTEVELT Last updated 13:15 02/02/2012

    The Earthquake Commission has proposed a series of sweeping changes to its business, including dropping contents cover and continually hiking its levy, as it awaits a review.
    EQC's briefing to its incoming minister, released this morning, makes a series of recommendations for consideration in a forthcoming review prompted by the Canterbury earthquakes.
    They are:
    - Removing contents insurance cover
    - Introducing variable premiums, depending on house size or hazards risk
    - Automatic adjustment of premiums and pay-out caps
    - Increasing the excess on claims
    The EQC levy was increased three-fold yesterday, jumping from $69 up to $207 per annum for the typical home owner.
    In its briefing to minister Gerry Brownlee, EQC says while private insurers had been consistently lifting premiums, the EQC levy had not moved in 18 years.
    ''The level of the premium should ensure financial sustainability of the scheme over time, given the Government's risk preferences,'' it said.
    ''It may also be useful to consider an automatic adjustment mechanism for the premium (and also any caps), to ensure that policy intent is reflected over time.''
    Excesses on claims had also not been reviewed since 1993 and were a complex mix. EQC suggested that a review of the excesses could ''improve mitigation incentives''.
    The briefing also floats the idea of EQC scrapping its operational work altogether and instead becoming purely a financial re-insurer to stand behind private insurance companies.
    But it comes down against the idea, recommending instead that it continues to handle the bulk of residential property claims.
    Coverage of home contents by EQC, however, is raised as a possible candidate for the scrapheap.
    ''EQCs coverage of contents increases complexity for customers and, in light of the Canterbury experience, requires disproportionate EQC resources during the recovery phase,'' the paper said.
    ''Arguably, private insurance or self-insurance may result in more effective mitigation by homeowners than EQC cover does.''
    The briefing also reveals that EQC expects ''a significant shortage'' of skilled workers in the Canterbury rebuild, particularly in trades such as carpentry, painting, bricklaying and plastering.
    There was ''a number of training initiatives to up-skill workers'' under way ''however, there is a limit to how far these will go in addressing the skills gaps that are expected given the nature of the repair work''.
    Shortfalls of 5175 painters, 2000 carpenters and 735 bricklayers had been identified in a study by the Canterbury Development Corporation.
    EQC plans a series changes to its business, including dropping contents cover and continually hiking its levy, as it awaits a review.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    Thanks for posting this Muppet I totally missed seeing anything about it!

    Cheers owe you one when you get down to the shaking City!



    • #3
      Rates or Insurance policy ?
      Both sides want the bill to be a part of the others.

      Labour wants quake levies to go on rates

      Homeowners and landlords could see hundreds of dollars added to their rates bills under Labour proposals for a sweeping overhaul of the disaster insurance regime.
      The policy unveiled by Labour's Earthquake Commission (EQC) spokesman Clayton Cosgrove would see EQC levies gathered by taking them off insurance premiums and adding them to rates bills so all residential properties are covered.