Southerly by David Haywood

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Southerly: Tower Insurance Have Some Bad News For You

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  • jh,

    Nothing about it on Cambell Live or Close Up. Perhaps not time or maybe they have to balance interests around the country or maybe the Tower adverts?

    Since May 2007 • 82 posts Report Reply

  • Yamis, in reply to BenWilson,

    It might indeed. I've moved one house before, and it is quite incredible what can be done, well worth the inquiry. I had mine cut in half right down the middle so that it could be taken down a narrow driveway to the subdivided section I had purchased. The machines used and the skills of the operators were amazing, to say the least.

    My family home (parents still live in it), was an old house/church in New Lynn that they had shifted out to Waitakere 30+ years ago. It too was cut in half to make the journey and then sent down a bank and joined together again. If you saw the site you'd think HTF?!

    Definately an option. The folk that move them are fairly imaginative and used to putting square pegs through round holes.

    Since Nov 2006 • 881 posts Report Reply

  • Danielle,

    My aunt had a house moved on to Waiheke Island. On a barge. And then had it put on top of a hill.

    Charo World. Cuchi-cuchi!… • Since Nov 2006 • 3669 posts Report Reply

  • Russell Brown,

    Here's the Herald's story, in which Tower's MD explains how a house being bulldozed doesn't make it a write-off.

    Auckland • Since Nov 2006 • 19116 posts Report Reply

  • Jeanette King,

    Good article, except for one detail:

    Mr Haywood, 42, lives in his almost 100-year-old house with his wife and two preschool children.

    should read Dr Haywood ...

    Edgeware • Since Oct 2010 • 29 posts Report Reply

  • BenWilson, in reply to webweaver,

    which means that none of the rest of us can switch policies to a better insurer because they're all behaving in the same appalling manner. Bastards.

    We can, however, switch governments.

    It’s not like the govt’s planning to build a motorway through the red zone, which I agree would be different (though equally distressing).

    Precisely. "Destruction by the government" is clearly meant to mean policy moves in which they compulsorily acquire land for development. This is NOTHING LIKE THAT. This is destruction by an earthquake that is so extreme that the government has found the entire area to be uninhabitable. Nothing is clearer than that full replacement insurance is meant to cover such an outcome. Definitely and absolutely this is weaseling, on a massive and reprehensible scale. Insurance companies take out a bet that this destruction will not happen when they give you the policy, and they profit handsomely for years because these things are very unlikely. However, sometimes they lose, as they have in the case of Christchurch. If they can't pay out, they should go to the wall, exactly like they are trying to force on thousands of their customers. That is the risk/return equation in place. That is "the consequences of choices" which the insurance companies are so quick to point out to the uninsured. They must pay, and if they go broke, that is too bad for them. If the government decides to rescue them from actually receiving this market discipline, then that is probably a good thing, but ONLY because it means their customers are not ripped off in the most shocking case of responsibility dodging this country has ever seen. Ever. And in that case the lesson is one the government wears, and should learn to make sure that insurance companies have sufficient assets to back the policies they have written, by law, and without exception.

    Auckland • Since Nov 2006 • 8737 posts Report Reply

  • David Haywood, in reply to Yip Yip,

    I understand how frustrating and upsetting this but it is not a loophole. It is quite clearly stated in your insurance policy that Tower does not pay out for damage/loss caused by destruction by the government. It will likely be in every other company’s wording. This was a government decision which is not an insurable event.

    Thank you for attempting the unpopular job of defending the insurance companies, Yip Yip.

    I guess I'd describe this is a legal loophole. I was aware of the clause about government-mandated destruction, but -- like anyone else -- I'd thought that this would be covering the situation where the government wanted to put a road through my house. I wouldn't expect insurance to cover this; I would expect to negotiate a settlement with the government.

    The way I see the current situation is this: I paid good money for "total replacement" insurance to protect me in exactly these circumstances -- an event such as a fire or earthquake in which I'd need to replace my house.

    And now I'm in exactly that situation. We've lost our house (or soon will) as a consequence of three major earthquakes. One can argue the point and say that it's not a direct consequence, but the earthquakes are certainly the only reason that we've lost our house.

    If there had been no earthquakes we would still have our house, right?

    Using your logic, you might argue that Tower Insurance should cover no houses at all in Christchurch. An earthquake is -- by definition -- a movement of land. Land is insured by the EQC. The movement of land led to the destruction of the houses. Therefore the damage to the house is caused by the land, which is not insured by Tower Insurance.

    The damage to our house is also being 'caused' by the land; but it has just taken a little longer to take place.

    Dunsandel • Since Nov 2006 • 993 posts Report Reply

  • Jeanette King,

    This is the nub of things. You have full replacement insurance, you need to replace your house after a series of disasters, and the insurance companies cite legal semantics. I wish there was a law that makes insurance companies comply with what a reasonable person would think the policy covers. And, judging from the thread here, all reasonable people think you should be covered in this situation. Just reassuring you David, that we all think that the insurance company stance is unreasonable. I mean, this is an extraordinary disaster!

    Edgeware • Since Oct 2010 • 29 posts Report Reply

  • Ian Dalziel,

    I’m pretty sure I couldn’t read a script stapled to my head.

    Graeme, you'll find the Leonardo da Vinci Call Centre has solved this problem by placing mirrors above their monitors and reversing the forehead script for reflection...

    apparently if your carpet is glued to the floor, it’s covered by the policy, if it’s tacked it counted as a chattel (and not covered).

    in the Press today Brownlee is quoted as saying:

    "The Government expects to be buying houses in the condition that is reflected in their valuation. If people want to start ripping things out of them, that will simply reduce the value," he said.
    "If you sell to the Government, then all legal rights belong to the Government, like it would with any purchase agreement.
    "It costs a minimum of $15,000 to $20,000 to demolish a house. The demolition contractors will expect to get some salvage out of it."

    It seems the only deal Brownlee did was to ensure the Demo companies make some dosh - no thought about replacement values in the Phantom Zone.
    even though if these were mortgagee sales the owners could strip the house of chattels - as I understand it, maybe someone else could clarify...

    This could also explain why Brownlee looked so damn shifty and nervous on the podium behind John Key during the initial announcement on Thursday...

    and here is a history of Tower insurance another piece of fine Government tinkering and dissolute policies...

    Once upon a time it was owned mutually by the policy holders - now I'm not sure who the shareholders are - but here are the directors if ya want to contact them.

    from their Values PDF
    TOWER’s values
    TOWER adheres to three fundamental values in all its business dealings:
    Commitment to our customers and to providing them outstanding service;
    Commitment to our employees and to providing them opportunity to grow and develop;
    and
    Meeting reasonable shareholder expectations and delivering competitive, sustainable
    and profitable growth.

    2 out 3 ain't bad, right?

    David, I'm signing up as foot soldier in your fight against corporate greed and for real justice.

    Christchurch • Since Dec 2006 • 5169 posts Report Reply

  • Goodoh,

    Take a bow Gerry, you got it just right - John Armstrong in the NZ Herald this morning.

    Wellington • Since Feb 2008 • 23 posts Report Reply

  • Joe Wylie, in reply to Ian Dalziel,

    David, I'm signing up as foot soldier in your fight against corporate greed and for real justice.

    Roger that.

    flat earth • Since Jan 2007 • 3631 posts Report Reply

  • Jeffrey Paparoa Holman,

    It's starting to get some air in the media - and hopefully some traction with the insurance companies - so good on you, David.

    Christchurch • Since Jun 2011 • 7 posts Report Reply

  • BenWilson, in reply to Goodoh,

    Take a bow Gerry, you got it just right - John Armstrong in the NZ Herald this morning.

    Not impressed, John.

    But that does not extend to a magic wand which could return things to what they were before last September.

    No one expects that. They want to be payed out by their insurers on the deal they struck. They have actually suffered, to boot, and no-one is saying Brownlee should be resurrecting the dead, or repairing the fault line. Just that he should be doing everything within his considerable power to make sure that thousands upon thousands of people are not rendered destitute by corporate irresponsibility.

    Auckland • Since Nov 2006 • 8737 posts Report Reply

  • Bart Janssen, in reply to Yip Yip,

    yup. I should say that I'm not seriously suggesting anyone commit arson just pointing out how stupid this policy is on the part of insurance companies.

    They continually moan that they have many people committing insurance fraud but they themselves sell deceptive policies to customers with no intent of ever honoring what the customer believes they are paying for.

    It is worth noting that these are the kinds of companies that National wants to run our accident compensation scheme in New Zealand.

    Auckland • Since Nov 2006 • 3472 posts Report Reply

  • Jeffrey Paparoa Holman,

    Oh, and by the way, I'm talking to Kim Hill about the 'quakes and the Japan trip again this morning, so I hope to get a chance to mention your case as an example of how insurance companies are NOT playing the kind of ball Gerry Brownlee was suggesting they would. 11.40am.
    Imagine if these corporate greed-meisters and bean counters got their hooks into ACC, as Gerry and John and Bill and Tony plan to let them. Be very afraid for your genuine claims there in the future: American model, the rich get cover and poor can go hang.

    Christchurch • Since Jun 2011 • 7 posts Report Reply

  • Lucy Stewart, in reply to Ian Dalziel,

    2 out 3 ain’t bad, right?

    From a certain point of view, as far as an insurance company’s board of directors are concerned, the shareholders are the customers. The, er, traditional customers only have to be placated just enough to not leave in droves. The shareholders are the people who can actually fire the board.

    Amherst, MA • Since Nov 2006 • 2093 posts Report Reply

  • Hebe,

    Nicky Wagner, one of our local MPs, just very kindly phoned me to semi-confirm what I've been told by Tower. The bit that didn't match is that Tower told me that homeowners could only get their replacement policy if the house had already been condemned; whereas Nicky thought that if the repairs exceeded some theoretical book value then Tower *would* have to pay out for replacement

    Even more bastardry from insurers: A friend had been told by the insurer that their house was written off after September 4; the land was to be repaired and the rebuild done. Today was told when ringing the insurer to check it's all proceeding, "Oh no. You're up for reassessment. We'll repair now, not rebuild." His house is near unliveable.

    I reckon the Govt and insurers have done a deal making the acceptance of the Govt offer the only way out. Simple; insurers just classify 98% of damage as rebuilds, especially for those with full replacement insurance (everyone who has a bank mortgage is required to have full replacement). That way they don't have to spend the really big money on rebuilds for anyone on red zone land. Paying the Govt a 2007 valuation for an old house is going to be, as David Haywood discovered, far cheaper for the insurer than paying for a rebuild.

    Anything can be classified as repair rather than a rebuild by a smart insurance company lawyer.

    Solves all a National Govt's problems in one swoop: homeowners get a "generous" offer (the 2007 valuations are far prettier than the 2010 GVs would be), and the insurance companies (and reinsurers: we're subsidising Warren Buffett here) get off lightly.

    The only way this one will be fought is multiple-party lawsuits, and a huuuge outcry before the election. Post-election we're all screwed.

    Wish I'd finished that law degree.

    Christchurch • Since May 2011 • 2636 posts Report Reply

  • BenWilson, in reply to Lucy Stewart,

    From a certain point of view, as far as an insurance company’s board of directors are concerned, the shareholders are the customers.

    One of the most screwed up things about modern capitalism. I'm a shareholder in my own business, along with one other person. Does that make me a customer of my business? No, of course not, it makes me an owner of the business, someone who is expected to understand the risks and returns of the endeavors I get into. My customers are the people who buy my products. If I had 10,000 silent partners buying in via the stock exchange, this does not change, and to suggest it does indicates a fundamental misunderstanding of capitalist enterprise. They aren't buying a product from me, they're buying ownership of a business that makes products.

    Auckland • Since Nov 2006 • 8737 posts Report Reply

  • DeepRed, in reply to Hebe,

    The only way this one will be fought is multiple-party lawsuits, and a huuuge outcry before the election. Post-election we're all screwed.

    Why aren't class-action lawsuits taken up more often here?

    The southernmost capital … • Since Nov 2006 • 4431 posts Report Reply

  • Ian Dalziel, in reply to Hebe,

    Liquidity frictions...

    Even more bastardry from insurers:

    May I suggest a new term for the financial
    repercussions rippling through Christchurch
    now - Shaftershocks

    Christchurch • Since Dec 2006 • 5169 posts Report Reply

  • nzlemming, in reply to Ian Dalziel,

    May I suggest a new term for the financial
    repercussions rippling through Christchurch
    now – Shaftershocks

    +1

    Waikanae • Since Nov 2006 • 2208 posts Report Reply

  • andin, in reply to Ian Dalziel,

    +1
    No wonder they we being all tight-lipped over the last few days ago.
    As I remember it, up till tuesday it was, can't say what, when. Wednesday, yes it will be tomorrow. Thursday announce, answer the questions, Friday it sinks in. Saturday, duck.
    Its one day at a time. Yes vision......

    raglan • Since Mar 2007 • 1239 posts Report Reply

  • Hebe, in reply to Ian Dalziel,

    Shaftershocks

    Ooh, that is so good.

    Christchurch • Since May 2011 • 2636 posts Report Reply

  • Sacha,

    And another part of the jigsaw - Brownlee is determined to rebuild profitably on red-zoned land. Public parks are for sissies.

    He said the land was being bought to give insured property owners the chance to leave so it could be remediated.

    "We obviously want to see it kept in a tidy condition, so as houses are vacated they will be demolished," he said. "The land will be simply, I would imagine, just put into a rolling flat-type state and grassed."

    It may be "some years" before the land could be engineered for residential sections again, he said.

    "For a good number of years it will be open space and we'll want to make sure that it is in a state that reflects the sort of general amenity value of Christchurch."

    Environmental and Engineering consultants Tonkin & Taylor estimate the total area of land to be abandoned at 350 hectares – just over twice the size of Hagley Park.

    Ak • Since May 2008 • 16996 posts Report Reply

  • Lucy Stewart, in reply to BenWilson,

    If I had 10,000 silent partners buying in via the stock exchange, this does not change, and to suggest it does indicates a fundamental misunderstanding of capitalist enterprise. They aren’t buying a product from me, they’re buying ownership of a business that makes products.

    I completely agree, that's how it should work. It's the fairly large disconnect between the people making the decisions and the displeasure of the people buying the products that makes for how the system actually works.

    Amherst, MA • Since Nov 2006 • 2093 posts Report Reply

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