Anderton Jim: Questions for Oral Answer — Questions to Ministers Questions to Members 
Anderton Jim: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:670;Page:17044] 
8. 
Hon JIM ANDERTON (Leader—Progressive) 
 to the  
Minister for Canterbury Earthquake Recovery 
: Does he stand by his comment in the House yesterday that “there is a period in which insurance companies will not provide cover”; if so what will the Government do to assist people who have already signed purchase contracts and are seeking insurance cover? 
Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake Recovery) 
 on behalf of the  
Minister for Canterbury Earthquake Recovery 
: Yes and I am advised that the same issue arose after the 4 September earthquake. Following that event a range of quite creative and innovative legal solutions was provided by the legal fraternity which made it possible for these contracts to be entered into and to function. I therefore advise people to consult their lawyers to see whether those same mechanisms can be employed in the interregnum of this earthquake. 
Hon Jim Anderton 
: I am well aware of the process after the first earthquake but I say to the Minister— 
Mr SPEAKER 
: The member should be asking a question. 
Hon Jim Anderton 
: Does the Minister understand that the insurance risk for Christchurch homeowners is currently much greater than normal; if so what does the Government plan to do to help owners desperate to have insurance cover for the most valuable asset they own? 
Hon MAURICE WILLIAMSON 
: I repeat that I am told that the legal fraternity found a number of quite innovative and creative ways. For example the new owner may actually just rent the property for some time while the old owner keeps the title. The insurance that was on the property would therefore carry on. The owner would get ownership only once insurance is provided. But I point the member to an article in the Christchurch  
Press  
today in which the largest insurance company in the area has said that it will continue to insure a house currently insured with it even if the new purchaser is not a customer of that company and so on. I hope other insurance companies will follow that lead and do the same. 
Hon Jim Anderton 
: Whatever the Minister may hope what would he say to a constituent of mine who sought to rehouse her parents after their home was destroyed in the earthquake by buying an undamaged property in an area that sustained no damage and who now finds after the purchase price was agreed and cash placed in the solicitor’s trust account that she cannot get insurance cover to enable the deal to proceed despite approaching the company that provides cover to the current owners? 
Hon MAURICE WILLIAMSON 
: I obviously cannot comment on a specific case because there are always elements to it. I am told that people cannot proceed with a purchase if there is a mortgage involved because the banks will insist on insurance cover. Therefore there will be an out in that case. If this property was bought for cash—as the member might have indicated; I am not sure—then that might not be the case. But in the end I am told—and the Canterbury branch of the Law Society has been doing some work on this—of the creation of some quite innovative techniques that will allow people to keep their properties covered until the insurance industry re-enters the market. That re-entry occurred not very long after the 4 September earthquake; I grant the member that this time it might be a little bit longer because of the magnitude of this quake. 
Hon Jim Anderton 
: Whatever the insurance industry and the legal profession might be doing over a period of time is the Minister aware of the stresses and strains on people who own homes that are uninsured; in that event will the Government help to underwrite the risk to completely innocent homeowners of having an uninsured home while it negotiates with the insurance industry to restore full insurance cover? 
Hon MAURICE WILLIAMSON 
: As I said earlier I am not sure it will be as widespread as that. If the largest insurer says that it will make sure its coverage carries on to a change of owner I am sure the other companies will follow because the market will not allow one to take such a beneficial rate. But in the end as I said I am told that these creative mechanisms that the lawyers used resolved the problem in nearly every case. For that reason alone I do not think the Government will be getting involved in the insurance market.