Getting the most out of your earthquake claim

5 years on, you deserve to get the most out of your earthquake insurance claim, but what is the best way to achieve your financial goals? – We explore three options, in no particular order.

1 – Managed Repair or Rebuild

This is the most common choice for earthquake claimants – Your insurance will pay for and manage the repair of your property, or a complete new build, and cover al the costs.

Pros

• ·      You can remain in your home after the repair.
• ·      Potential for moderate financial gains through increased house value.
• ·      You can end up with a house much better than the original.

Cons

• ·      You will probably have to move out while the repairs take place.
• ·      It is often difficult to get definitive timings from the repairer.
• ·      You need to oversee repair strategy to ensure a quality end result

2 – Insurance Settlement

Cash settling with insurers is becoming a more popular option for claimants. Rather than your insurance company repairing your house, you will be paid out an agreed cash amount instead. The insurer will then terminate your old policy, leaving your damaged house uninsured. You may then take it upon yourself to manage a repair and seek insurance cover at a later date.

Pros

• ·      Generally the insurer will agree to pay out more than the estimated cost of repair.
• ·      Choose whether to repair your house or use the cash for something else.

Cons

• ·      You assume the risk of any unknown problems, which may become apparent during repairs.
• ·      Maintenance costs can mount quickly if you choose not to repair your house.
• ·      Getting insurance again is difficult, and will require the repairs to be completed.

3 – Full Cash Settlement

Cashing in is done in two parts; first you negotiate a cash payout from your insurer, then sell your damaged house uninsured (often referred to as selling ‘as-is-where-is’).

Pros

• ·      This will usually be the most financially rewarding.
• ·      Most as-is-where-is property dealers will provide you with the flexibility to remain in your house while you look for a replacement.
• ·      You are not exposed to unexpected repair costs.

Cons

• ·      Negotiations with insurers can be stressful.
• ·      If you don’t have a pre-settlement offer, you’ll be left with an uninsured property for a time.
• ·      Not all purchasers of as-is-where-is properties commit to carrying out repairs.

References

www.WhatsMyOffer.co.nz – New Zealand’s number one as-is-where-is property dealer. What’s My Offer repairs all of the houses they purchase, and offer delayed settlement options with no fees.

Dean Lester Services – Dean has an extensive insurance background and offers his experience for your insurance negotiations, ensuring your settlement is fair. Phone: 027 226 0762  

www.BuildersCrack.co.nz - A very handy website for finding local tradesmen for your earthquake repairs in Canterbury.