Goff: quake rebuild has 'stalled'

Shops in Opawa collapsed after the Christchurch earthquake. Phil Goff says he believes rebuilding has stalled because insurers are reluctant to pay. Photo / NZPA

Work on rebuilding Christchurch has "stalled" because of insurers' reluctance to pay claims and to cover new buildings and the Government should consider filling that gap to get work underway says Opposition leader Phil Goff.

Mr Goff this morning said Christchurch had "a real problem" with insurance companies not paying out on claims and not prepared to insure new homes.

"We need to know from the Government have they considered making the Government the insurer of last resort?"

"The government needs to come clean with the information it's got. We're trying to work in a bipartisan way with them but if they want bipartisanship, they've got to share information with us. What can they do to get that rebuilding process under way? because at the moment it's stalled."

But Finance Minister Bill English said the Government was "not looking at setting ourselves up as an insurance company".

However he acknowledged there were "any number of stories about people being quoted very high prices for insurance in a way that makes it almost impossible for them to get it".

"We've got to bear in mind here the insurance companies will be wanting to see the prevalence of earthquakes drop off. They've been concerned about the risk further quakes.

"We're monitoring the issue pretty closely because this is really a matter of timing. We're confident that the aftershocks will tail off that the possibility of higher premiums is going to attract insurers into the market, the question is how long that will take and whether there's any action we can take in the meantime to encourage insurers back into the market."

Earthquake Recovery Minister Gerry Brownlee leaves for Europe tomorrow on a mission to persuade the reinsurers who provide financial backing to insurance companies that even after the Canterbury earthquakes, New Zealand is not an overly risky market.