Christchurch quake washup pushes spike in insurance complaints

There's been a 66pc jump in complaints about insurance being made to the Insurance and Financial Services Ombudsman - due to payout disputes related to the Christchurch earthquake. Photo / NZ Herald

A push by insurers to settle house insurance claims stemming from the Christchurch earthquakes is partly behind a spike in complaints to the insurance ombudsman.

Nearly a third of the 68 complaints accepted for investigations by the Insurance and Financial Services Ombudsman in the last three months related to house insurance with 22 per cent connected to Christchurch house insurance claims.

The services total number of complaints is up by 66 per cent compared to same period last year when there were 41 complaints which led to an investigation.

I don't think it will be done this year," she said. "I think there will be a few more years of this.

IFSO chief executive Karen Stevens

It receives around 3000 inquiries a year of which around 300 lead to investigations.
IFSO chief executive Karen Stevens said while it had seen a tail off in complaints relating to insurance claims stemming from the Christchurch earthquakes she doubted 2016 would see the end of them.

"I don't think it will be done this year," she said. "I think there will be a few more years of this."

The increase was also being driven by some new complaints coming in around the credit contracts and consumer finance act which came into force last year.

Stevens said most of the credit contracts complaints it had received so far related to motor vehicle finance and people not meeting the payments on their car loans.

"They have failed to make loan repayments and have the prospect of having their car repossessed."

Stevens said the problems were not linked to any one company and appeared to be across the board.

People have not fully appreciated the consequences of not making payments.

Karen Stevens

"In some of the credit cases the company has gone above and beyond the call to make it easy for the person to make repayments. But they have simply not made the payment."
Other than making sure the correct process had been followed there was not much it could do in those situations, she said.

"People have not fully appreciated the consequences of not making payments."
Under the act lenders now have to make sure borrowers can afford to repay a loan before giving out the money.

Stevens said borrowers needed to make sure they could afford to pay for a loan before taking it out.

The service has around 4000 members which include insurers and financial advisers.

INSURANCE INVESTIGATIONS

68 complaints accepted for investigation by the Insurance and financial services ombudsman for December, January and February 2016:

• House = 32% - of these 22% relate to Christchurch
• Contents = 10%
• Vehicle = 9%
• Income Protection = 9%
• Travel = 7%
• Credit contracts = 6%
• Financial Advice = 4%
• 41 complaints accepted for investigation in December January and February 2015.
• Vehicle insurance = 17%
• Income Protection insurance = 17%
• House insurance = 15%
• Life = 12%
• Travel = 10%