Severe weather in Auckland prompts insurance warning

Media Release 30 January 2023

With unprecedented flooding in Auckland over the last weekend, and severe weather warnings for the upper North Island early this week, the Insurance & Financial Services Ombudsman (IFSO), Karen Stevens, says now’s the time to get the next steps right. Refer to our checklist of things to do.

If damage is caused, Stevens warns against throwing everything away to clear it up quickly.

Although clearing up is only natural, this is a critical time to get it right. Providing it’s safe, take photos or videos of damage and make a list of all things affected. It’s important to establish what has been damaged and prove ownership to your insurer. Your claims process will be easier with those documents to back up your claim.”

Stevens recalls a case where a homeowner made a list of all damaged items that she’d thrown away and sent it to her insurer, with nothing else to show they ever existed.

“Because there is no proof in these cases that the items were owned by the claimant, the insurer was quite within its rights to say, ‘Unfortunately, you’ve got to give us something more than just a list.’ Photos of items claimed, and/or receipts if you still have them, are much more compelling.”

People are expected to do repairs that are necessary to prevent further loss, but they should make non-essential repairs only after talking to their insurer. Insurers can have differing opinions to homeowners on what are essential repairs e.g. pulling up and getting rid of carpet and furniture.

“If in doubt – check it out with your insurer. If you have a financial adviser, get in touch with them.”

Stevens says that making a thorough claim early is good practice.

“There’s no such thing as a silly question – if you don’t know what’s covered, go ahead and ask. Check exactly what you need to do to make a claim”. Providing the right information will save time when insurers and assessors are under pressure due to the sheer volume of claims.

“It’s a good idea to know what type of insurance you’ve got when a disaster happens. You need to know whether your house is insured for full replacement value or, if not, what the value of your ‘sum insured’ is for your house”. Some of your contents will be insured for replacement, while others will only be insured for indemnity cover, so their age will be a relevant factor. Stevens reminds those affected that “your contents insurance provides a benefit if your house is uninhabitable – there will probably be a time or value limit, but it’s worth talking to your insurer about it now”.

Over the weekend, we saw cars swept away as well as contents in the floods. You need to know if your car was insured for market value or agreed value to better understand what your insurer is likely to pay out for the claim – the amount you agreed on, or what the car would have sold for immediately before the floods.

There is so much to think about for people caught up in such a dire situation but, with a bit of understanding around your insurance, it might make it a bit easier.

The IFSO Scheme provides a free service to consumers who have complaints about their insurers – call 0800 888 202 or visit the website for specific assistance understanding insurance cover for Natural Disasters.