NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Personal Finance

Late payment as helpful as no insurance: Lessons from the Canterbury quakes

Tamsyn Parker
By Tamsyn Parker
Business Editor·NZ Herald·
16 Sep, 2018 08:20 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Research shows businesses who got delay insurance payouts were the same as those who were not insured after the Canterbury earthquakes. Photo/NZPA / David Alexander.

Research shows businesses who got delay insurance payouts were the same as those who were not insured after the Canterbury earthquakes. Photo/NZPA / David Alexander.

Getting a delayed payment from an insurer resulted in the same recovery for a business as those with no insurance, research on the impact of the Canterbury earthquakes has revealed.

Researchers from Resilience to Nature's Challenges have been investigating the role of insurance after the 2010-11 Canterbury Earthquakes as one of 11 government-funded national science challenges.

It surveyed businesses about their commercial insurance cover and found those with insurance who were paid promptly recovered much better than those without insurance.

But there was no significant difference in the recovery of those businesses who had insurance and whose payment was delayed and those who had no insurance at all.

Ilan Noy, lead researcher and economics professor at Victoria University, said this had come as a surprise.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

"The primary assumption we always go by is that insurance is a good thing. That public policy should encourage insurance penetration."

But the research found having it was not necessarily better than not having it if the claim payments were not functioning well.

"It is good, as long as it pays promptly."

Advertisement
Advertise with NZME.

Noy said while there were a range of reasons why payouts were delayed, it was more of a systemic problem that there were no regulations around how long an insurer had to pay out a claim.

"[The insurers] have no legal obligation to pay within a certain amount of time."

He said most countries had an insurance regulator which could set deadlines for payment and investigate delays.

"There were a lot of reasons for delays but some of it could have been sorted by a regulator."

Discover more

New Zealand

Inquiry to assess where EQC quake response failed

17 May 02:19 AM
Personal Finance

$173m and counting - the worst year for storms?

25 May 02:00 AM
New Zealand|politics

Quake tribunal not fair says Insurance Council

01 Aug 03:14 AM
New Zealand

Canterbury man fails to prove quake damage

17 Aug 04:45 AM

New Zealand's insurance law is under review at the moment and Noy said he had submitted asking for a regulator to be set up.

He said one of the reasons for the delays was that some insurers had so many types of contracts including one which had more than 100 different types.

"Who of their customers had what contracts was a complete mess."

"If each insurer had the same contract then resolution would have been a lot simpler."

The Reserve Bank is the current insurance regulator but Noy said it only regulated the insurers to stop them from failing financially.

That came as a result of the global financial crisis when AIG collapsed in America and in New Zealand AMI collapsed under the weight of the Canterbury earthquakes and was then bought by IAG.

Advertisement
Advertise with NZME.

He said the financial aspect was only one part of the role a regulator should play.

A regulator should also be looking at the types of contracts offered and claims resolution.

The research also looked at how and when the Earthquake Commission paid out money and what economic impact that had on Canterbury.

"Insurance payments were staggered over five years, which gave us the opportunity to identify their local impact."

Noy said for every 1 per cent increase in insurance payment for building damage, economic recovery increased by 0.36 per cent.

It also found cash payments contributed more to the local recovery rather than repairs carried out through the managed repair programme.

Advertisement
Advertise with NZME.

He said the managed repair programme was introduced because of fears people would spend the cash and either walk away or stay living in a sub-standard home and spend the money on other things.

Noy said it did not find evidence that people had walked away from their homes. But it did not know if they used the cash to fix their homes or spent it elsewhere.

"To really delve into those questions - we really need the data from the insurance companies."

So far no private insurers had given their data to the researcher.

He also did not know if not using the cash to fix up had resulted in people being unable to get insurance and he doubted people would own up to that.

But he said it was another area where having a regulator would help.

Advertisement
Advertise with NZME.

"If a home owner is not able to get insurance a regulator should be informed."

He said at the moment if people could not get insurance there was no way of knowing as the insurance companies did not have to tell anyone.

"In other jurisdictions they don't have to tell the public but they do have to tell the regulator."

He said this could become more of an issue as insurers changed the way they were insuring houses.

"There is a concern that some regions won't be able to get insurance - areas like South Dunedin.

"I don't think at this point we have large areas not covered - it is more of a concern for the future."

Advertisement
Advertise with NZME.

But he said as insurance companies started to change the way they priced policies it could become a bigger issue sooner rather than later.

"I'm not talking about a decade away but months. It definitely could happen quickly."

He hoped these issues would be dealt with as part of the insurance law review and the EQC review currently under way.

"I still think insurance is a good thing. I'm definitely not arguing we need less insurance."

He said for the public the biggest issue was under insurance of houses.

"We don't really know what part of the population is under-insured."

Advertisement
Advertise with NZME.

In commercial insurance the biggest issue was business interruption insurance and the fact that many did not understand it.

"There is a whole variety of contracts solving that issue."

But he said a lot of the time business interruption insurance was only triggered if the event had a direct impact on the property.

That could mean if there was a loss of power to a business that stopped it from being able to operate it was not covered.

"People don't know what they are covered for and companies don't know what they are insuring for."

Save

    Share this article

Latest from Personal Finance

Business|personal finance

Why your Lego collection could boost your investment portfolio

06 Jul 07:00 PM
Premium
Official Cash Rate

Economists divided over Reserve Bank's next OCR call

06 Jul 05:00 PM
Premium
Opinion

Nadine Higgins: How innovative schemes are aiding first-home buyers

05 Jul 05:00 PM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from Personal Finance

Why your Lego collection could boost your investment portfolio

Why your Lego collection could boost your investment portfolio

06 Jul 07:00 PM

Collecting things like Lego, whiskey and fashion could be financially beneficial.

Premium
Economists divided over Reserve Bank's next OCR call

Economists divided over Reserve Bank's next OCR call

06 Jul 05:00 PM
Premium
Nadine Higgins: How innovative schemes are aiding first-home buyers

Nadine Higgins: How innovative schemes are aiding first-home buyers

05 Jul 05:00 PM
Premium
Mary Holm: The ways to make your cash last in retirement

Mary Holm: The ways to make your cash last in retirement

04 Jul 05:00 PM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP