Southern Response insurance claimant calls on Government to stand up for those underpaid

May 7, 2019

Cameron Preston, who says he was underpaid by the Government-owned insurer, says they need to force the organisation to “do the right thing”.

A Southern Response insurance claimant is calling on the Government to take a stand for those who have been underpaid by the organisation.

Yesterday, TVNZ1's Breakfast exclusively revealed Australia's top class action law firm is funding the case against the Government-owned insurer.

It is alleged about 3000 Christchurch earthquake claimants have been underpaid about $300 million.

What’s broadly being alleged is that AMI, and then Southern Response, prepared two detailed repair or rebuild analysis (DRAs) costings for each property - one for the client, one for itself - and the one it gave to its clients did not contain costs like demolition, professional fees and contingency.

It's alleged the insurance company underpaid the claimants by roughly $300 million, reports John Campbell.

It is understood people, particularly in the red zone, were being offered the low figure for compensation in a "take it or leave it" manner, and Southern Response held onto the higher one.

Cameron Preston told Breakfast today he was offered a "take it or leave it" offer of $178,000, including his EQC payout, a big difference to the same document which appeared years later which stated $252,000, excluding his EQC pay.

"I personally went through that experience, in fact all Southern Response claimants before a particular date went through that experience."

Mr Preston said it was "not a particularly sophisticated deception". Anyone with knowledge on spreadsheets would know how to hide cells, and that was essentially what was done, he said.

"They hid large costs from claimants when they presented them with these DRAs to settle them."

People in the red zone, keen to sell their land to the Government and move on with their lives after the disaster, were presented with wrong information, Mr Preston said. "They accepted it in good faith, and they moved and settled their claims, and years later they find that these cells were being hidden."

The Supreme Court ruled Southern Response to be in the wrong, but the organisation is yet to put up its hand and admit they were wrong and pay the people, he said.

"They [the Government] need to really force Southern Response to do something.

"Nothing is going to be done by Southern Response itself, they can say "oh look it's in court, we're not going to say anything", but behind the scene they need to be taking a really close look at what's happened and they need to force Southern Response to do the right thing before these poor people are thrown at the arms of lawyers and litigation funds."

When Mr Preston caught on to what was going on some years ago he worked to co-ordinate group meetings of Southern Response clients and a class action against them.

At the meetings, some people were put under covert surveillance from private detectives working for the organisation who posed as claimants at the meetings.

"The insurance industry are well-known to delay and deny claimants in the event of major disasters, but you add on top of that the might that comes with the Government, and really there's a fundamental imbalance of power and that's very much what I and many thousands of other policy holders have experienced in Canterbury."

Breakfast revealed yesterday about 3000 Christchurch earthquake claimants are being backed by a major Australian law firm in a class action.

Prime Minister Jacinda Ardern told Breakfast later this morning that she could not comment on the case while it was before the courts, but said "more broadly, it's fair to say no one wants to see ongoing, unresolved cases".

"Making the general statement that whether or not it is a disputed claim or an unresolved claim, people need finality, I mean, this has been going on for so long," she said.

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