EARTHQUAKE COVER

Evening Star, Issue 24280, 22 August 1942, Page 8

EARTHQUAKE COVER

INSURANCE FOR MINOR DAMAGE IMPOSSIBLE

(P.A.) WELLINGTON, August 21. The executive of the Council of Underwriters, in reference to the discussion in Parliament regarding earthquake insurance, points out that earthquake damage, whether by fire or shock, is normally excluded from fire insurance policies issued throughout the Empire. Jf the owners of properties, however desire to include the risk of earthquake, that cover may be granted on the payment of an additional premium, subject to certain conditions at varying rates. The cover is granted to protect a property owner against a major disaster or claim, but it was never intended, nor could a cover be granted, to protect those who do insure against earthquake for minor damage. The conditions under which insurance companies throughout the world grant earthquake cover provide that the insured must bear a certain amount of the damage. if this condition did not apply no insurance company would grant an earthquake cover. In New Zealand not more than one dwelling in 5,1)00 is insured against earthquake, so that only a very small percentage of the householders have, been affected by the conditions of the earthquake cover. All policy holders are notified to read the conditions of their policies The liability of the insurance companies in Wellington province alone ia estimated at not less than £50,000,000 If the recent earthquake in Wellington had been slightly greater the severity of the claims on the companies would have been enormous, particularly if there had resulted a conflagration such as had occurred in Napier. A conservative estimate of the losses to be paid by the companies in the Wellington province ns a result of the two recent earthquakes is £300,000. Earthquake insurance is granted by the insurance companies only when a cover is specially applied for. The insurance companies, realising the huge liability involved, do not seek tins class of insurance, and it would be impossible at the rates charged, or even at greatly increased rates, to grant earthquake cover for minor damage. The insurance companies would welcome a discussion with the Government on the subject, and would be pleased to place before the Government any further information it may desire.