Why bother getting insurance?

February 18th, 2013 at 1:00 pm by David Farrar

Homepaddock highlights this policy from NZ First:

All uninsured red-zoned land owners who accept the current Government’s 50 per cent compensation offer will get the other half should New Zealand First become part of the next coalition Government.

Ensuring these landowners are treated fairly and receive the full rateable value of the land will be a bottom line in any coalition negotiations.

Very unwise for a party on 4% to start laying down non-negotiable policies two years before an election.

Ele points out:

The party obviously doesn’t understand that what it regards as treating these landowners fairly would be treating companies, their staff and shareholders, and taxpayers most unfairly.

This would kill the insurance industry because no-one would bother insuring their properties if they knew the government would pick up the pieces after a disaster.

This policy passes all the risk and costs from private property owners and insurance companies to the government which means taxpayers.

Exactly. The precedent would be horrible. You’d be mad to ever get insurance again.

Now remember that NZ First has said this is a non-negotiable bottom line policy for any future Government.

Isn’t MMP great!

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27 Responses to “Why bother getting insurance?”

  1. Chuck Bird (4,906 comments) says:

    “Very unwise for a party on 4% to start laying down non-negotiable policies two years before an election.”

    Why? It will get them some votes and they will find some excuse for a change of mind if they get elected.

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  2. Pacific Empire (6 comments) says:

    I think you are fundamentally misunderstanding the issue.

    You can’t get insurance for bare or commercial land, so why would an offer of full compensation for landowners have any impact on the insurance industry? NZ First are not proposing offering compensation for uninsured buildings.

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  3. burt (7,428 comments) says:

    Winston… NZ’s most experienced and accomplished liar.

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  4. andyscrase (89 comments) says:

    You need insurance to cover for partial or total loss of property when the land is OK (as in my case)

    Although after 2 years of fruitless effort I am wondering whether it is worth it anyway.

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  5. Harriet (5,201 comments) says:

    “…Isn’t MMP great!…”

    It’s not so much as ‘this is what happens under MMP’ but rather “Why does it happen?”

    It largely happens because the 2 main parties ‘disenfrancise’ people: The parties largely behave exactly the same so as to get the support of the minors – or what we used to call under FPP – the swinging voters.

    I think that National NEEDS a Conservative Party on it’s right to counteract the Greens, or National will always be at the bidding of Labour/ Greens policies.

    Like they currently are!

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  6. m@tt (636 comments) says:

    “This would kill the insurance industry” and “You’d be mad to ever get insurance again.”

    What a load of unsubstantiated and utter bullshit. If the government flip-flopped and implemented this tomorrow the insurance industry would still be here in a month, 6 months, a year, a decade… take your pick.

    The fact that some people got a deal from the government in relation to just one event would not stop me, nor the vast majority of people, from insuring their house and land against the million and one other things that can happen to it.

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  7. burt (7,428 comments) says:

    This Winston First promise for free other peoples money thing…. Is it targeted by race or age ? Just asking ….

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  8. YesWeDid (1,056 comments) says:

    Christ, how many times does this need to be explained to you DPF?

    You can’t get insurance for bare land, these people are left with losing 50% of the value of their asset through no fault of there own.

    This guy is taking the government to court as he stands to lose $1M:
    http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/8315916/Developer-to-fight-1m-loss-in-court

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  9. krazykiwi (8,040 comments) says:

    Isn’t MMP great!

    No, it most certainly is not.

    MMP is accelerating the development of policy which expands the state, at a cost of diminished personal responsibility and declining national productivity.

    Introduced under the guise of better democratic representation, it is instead helping democracy incrementally dissolve into anarchy.

    Democracy is the frog in the pot. MMP governments are helping turn up the element.

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  10. kiwi in america (2,314 comments) says:

    Yeswedid
    Wrong – you can get insurance for raw land it’s just none ever buys it going on the assumption that there is no points- quite a different matter to it not being available to buy.

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  11. burt (7,428 comments) says:

    Can somebody in the motor vehicle industry please make a donation to Winston First so that he makes a non negotiable coalition policy of free vehicle replacement for non insured drivers who have accidents…

    Oh, and then 3 years later he can declare the donation….

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  12. YesWeDid (1,056 comments) says:

    @Kiwi in america – from Duncan Cotterill Lawyers:

    ‘It is worth keeping in mind that bare land is not covered by either the Earthquake Commission or private insurers. Land is only covered by the Earthquake Commission and/or private insurers if there is a dwelling on the property.’

    Here’s the link: http://www.duncancotterill.com/index.cfm/1,159,669,43,html/Seek-advice-before-buying-a-bare-section

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  13. Nookin (3,569 comments) says:

    “these people are left with losing 50% of the value of their asset through no fault of there own.”

    So the taxpayer steps in as indemnifier?
    Is it the taxpayers’ fault?

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  14. Nookin (3,569 comments) says:

    “Christ, how many times does this need to be explained to you DPF?

    You can’t get insurance for bare land,”

    EQC cannot pay out on non-residential land. It is not in the Act. EQC can only do what is in the Act. Insurers are not so constrained. Insurers can insure against whatever risk they like. That’s how come some people like models, have their legs insured.

    Have you telephoned an insurance company to find out if it is prepared to offer insurance on bare land? Did it say “no”, it is not allowed?

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  15. YesWeDid (1,056 comments) says:

    @Nookin – why don’t you ring an insurance company and ask them? Look I’ll help you; State are 0800 80 24 24, or you could try AMI on 0800 100 200. Maybe also ask them if they will insure your legs or that enormous brain you have squeezed in between your ears.

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  16. SPC (5,665 comments) says:

    The base of the issue is that people who have insurance pay contributions to the EQC, those who don’t do not.

    Their insurance cover is for their building/replacement – and the EQC part also covers land. This ensures they can rebuild on another land site if necessary (floods and earthquakes being capable of taking out the land as well as buildings).

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  17. Cunningham (846 comments) says:

    Nookin (2,411) Says:
    February 18th, 2013 at 3:04 pm
    “these people are left with losing 50% of the value of their asset through no fault of there own.”

    So the taxpayer steps in as indemnifier?
    Is it the taxpayers’ fault?

    You are absolutely right, I feel for these people but are we are taxpayers supposed to bend over and take it? Do we deserve to be financially liable for it? The answer is no.

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  18. Rodders (1,756 comments) says:

    What about NZ First’s 1996 “non-negotiable” policy to buy back the forests?

    Hasn’t happened yet….

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  19. Nookin (3,569 comments) says:

    Yeswedid

    You are the one making the categorical assertion — not me. I am pointing out that land cover is a matter of negotiation and is not prohibited by law. EQC does not cover land. It cannot. Insurance companies can. The reference to the Duncan Cotterill comment is not authority for the proposition that no insurance company will insure land. It is simply a statement or practice. If you want to respond to everyone who disagrees with your all encompassing and non-authoritative statements by resorting to personal abuse then fill your boots and prove that you are the narrow-minded little bigot that your posts suggest that you are. It doesn’t worry me none.

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  20. Tauhei Notts (1,687 comments) says:

    The churches should step in and pay up for the loss of uninsurable land.
    That is because the earthquake was an act of God.
    Athiests can then just suck their loss up their chutney.

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  21. burt (7,428 comments) says:

    Rodders

    What about NZ First’s 1996 “non-negotiable” policy to buy back the forests?

    What about Winston saying he would pay back the stolen $158,000 ????? Perhaps he needs a secret donation from some insurance companies into his secret trust to make it possible…..

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  22. Rodders (1,756 comments) says:

    Fair comment, burt.

    Might be quicker to list the promises that NZ First has made and then kept.
    Probably only the ones that involve spending a lot of taxpayers money!

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  23. kiwi in america (2,314 comments) says:

    YesWeDid
    More fool Duncan Cotterill for not knowing the whole insurance market. Most insurers dont offer the cover but the one I worked for in the late 90’s did and we paid out on the policy. The client had a bach in a beach resort in the Nelson Bays area in a quite an exclusive area with a restricted access beach and stunning views. They had a section next to the bach. In a massive rain storm the land that the bach was on was so unstable that the entire land moved downhill destroying the bach. The bach was covered under our Fire and General policy and so with that came the EQC cover. The bach had a full replacement policy and the owners bought top up cover for earth damge for the empty section from us. EQC paid out the $100k for the land on which the bach was and we paid out for the neighbouring section and the dwelling. The owner (who was quite wealthy) took the combined payout and was allowed under the communities rules to rebuild on some land further up the private road and he built a stunning luxury 3 storey bach (which cost well more than what his combined payout was but that was his choice.

    I accept that the cover for the land is not likely to be available from every insurer but we offered it at the time so be careful with your blanket assumptions. The premiums were actually very reasonable and at the time that he purchased the cover he did so specifically to cover in case of mudslide or earthquake.

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  24. kiwi in america (2,314 comments) says:

    YesWeDid
    The fact is that any residential or commercial insured if they really wanted cover for their land would’ve been able to find it and no basic lower cost residential insurers like AMI and State would not offer it so giving Nookin their numbers is churlishness. You wont find any insurer that would cover land now but we knew of a few that did back when we offered it.

    For CERA to offer 50% is more than generous. In the business its called an ex gratia payment. These land owners took a risk that even in a earthquake their land would be safe. They were wrong and they want the taxpayers to reward them for their failure to adequately assess risk and make arrangements accordingly. The developer from Brooklands who has taken CERA to court claiming $1 million because he didnt get 100% of his land from the government would’ve had good insurance arrangements and any broker worth their salt could’ve found him an underwiter to cover the land of the unsold sections. Winston Peters is happy to buy votes by promising the earth (literally) to the earthquake victims – I’m sure Labour will follow suit and get into a bidding war to see how much MORE taxpayers money can be thrown at Christchuech on top of the $10 billion odd spent/to be spent so far.

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  25. Nookin (3,569 comments) says:

    KIA

    Succinct and right on the knocker. Thank you.

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  26. Mark (1,502 comments) says:

    MMP is the reason we have to endure Winston and John Banks.

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  27. SPC (5,665 comments) says:

    Nookin, really?

    1. You wont find any insurer that would cover land now

    2. their failure to adequately assess risk and make arrangements accordingly … and any broker worth their salt could’ve found him an underwiter to cover the land of the unsold sections.

    These statements are not consistent.

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