Quake death claims reach 100
Life insurers have paid out nearly $18 million on 100 death claims from the February 22 Christchurch earthquake, according to the Investment Savings and Insurance Association (ISI).
Thursday, November 24th 2011, 11:28AM
by Niko Kloeten
The ISI's quarterly statistics to September 30 show its members have paid out $18.5 million directly relating to the quake, comprising $17.6 million for death claims, $139,000 on trauma and permanent disability, $203,000 in income protection and $623,000 in redundancy.
The 100 death claims doesn't necessarily mean 100 individual people as some of the quake victims may have had more than one policy.
However, the amount paid out by life insurers is nearly double that paid by ACC, which as at September 10 had paid out $9.23m for 8,071 claims at an average of $1,144 per claim.
ISI chief executive Peter Neilson says the latest statistics indicate a high degree of under-insurance.
"When you factor in that the median house price in Christchurch prior to the earthquake was reported at $333,800, and that many people are likely to have had considerable mortgages against their properties, it becomes pretty clear that many people need more cover than they currently hold.
"We understand that our industry still has a lot of work to do to ensure Kiwis are adequately covered.
"While 100 death claims was actually higher than we expected, the average claim payment of $176,000 intuitively feels a bit light - it's only around three times the average salary and probably means that most families are only really covering their mortgage."
And while this probably means that most families will not have to sell their homes, Mr Neilson says they are likely to have had no ongoing protection against the loss of income following the death of a loved one.
"We need a wider understanding of how many families are vulnerable to the loss of a major earner. Our under-insurance research project is aimed at improving our understanding of what needs to be done to ensure New Zealanders are better prepared for the uncertainties of life.
As an industry, our job is to help them make better informed decisions and provide policies that are easy to understand and apply for."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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