Briefings: Disaster fund ‘fully exhausted’ after Christchurch, Kaikoura claims

Hundreds of documents briefing new Government ministers on key policies have been released. Herald journalists have been analysing the Briefings to Incoming Ministers (Bims). Here we look at Natural Disasters.

New Zealand’s emergency cash stashed away for major natural disasters is forecast to be “fully exhausted” once all of the Canterbury and Kaikoura earthquake claims are settled, according to internal Government documents released today.

It could take about 30 years to replenish the Natural Disaster Fund (NDF) to the level of current reinsurance deductible of $1.75 billion, new Minister Responsible for the Earthquake Commission (EQC) Megan Woods has learned since taking office.

Although increased premiums would see the funds topped up within 10 years, that does not take into account any future events, the EQC briefing document handed over by the outgoing National government to Woods says.

The Briefing to the Incoming Minister (Bim) also says EQC accepts that “mistakes and missteps” were made after the devastating Canterbury earthquake sequence 2010-2011.

It notes that since the Canterbury quakes, EQC has received 591 litigation cases, with 334 of them having been closed by September this year.

However, the document states that lessons have been learned from the unprecedented event, including the need for “early, ongoing and effective” communication, particularly with affected residents.

It also stresses the need for clear and simple claim processes, and streamlined internal processes, “so as not to add additional stress to individuals and families coping with a difficult situation”.

Managing the scaling up of the organisation in a controlled way was also crucial to ensure there are sufficient trained frontline staff to manage the volume of claims.

At a broader level, EQC notes that cash settlement claims are ” easier but not always best” and that New Zealand’s dual insurance system needs to be more efficient.