Flood claim report

Press, 27 August 1977, Page 5

Flood claim report

PA Wellington. Loosely drawn insurance contracts have led to disputes and delays in settling flood claims arising from .he flooding in Wellington and the Hutt Valley last December, according to the annual report of the Earthquake and War Damage Commission tabled in Parliament. The report says concern about loose contracts used by commercial and industrial claimants has centred on liability between the insurer and the commission. It says it must be understood that the commission works, under an act of Parliament controlling public moneys and, therefore. cannot deviate from a strict interpretation of the clauses expressed in the contracts of insurance as issued. Loose contracts have meant that senior commis-

sion staff members have had to spend a lot of time trying to sort and interpret badly drawn up contracts. The report reveals that although only about 580 flood claims were received arising from the December floods, the predominance and magnitude of commercial and industrial claims resulted in an unprecedented flood payout. Some individual claims had exceeded $200,000 and the high ratio of claims from these sectors had. in fact, upset the viability of the commission’s disaster fund. The heavy demands on the fund for the second successive year resulted in the fund for its first time since its inception in 1948 being inadequate to meet claims. This situation was only rescued by the Government’s agreement to supplement the fund by a

transfer from the commission’s earthquake fund. The report says that the December floods I raised again the question j of the desirability of some [ further form of relief. It suggests this should be divorced entirely from I the cover on insured prop- I erty under the existing legislation and could take the form of a local relief scheme. Local authorities with • their local knowledge and [ expertise through their engineering staff would best be able to investigate the problems associated with remedial measures and administration of such a scheme, the report says. The commission says it j had already outlined to the Government a scheme | which would greatly assist I homeowners at a min- ! imum expense to the com- j munity. I