Caution Exercised while Evaluating Damage
Crawford & Company® adjusters responding to the 7.8-magnitude earthquake that struck New Zealand in November have identified transport dependency and extensive area damage as significant themes influencing the claim landscape.
With teams deployed from four hub locations, work has been underway since emergency services lifted curfews. According to Dean Garrod, Crawford® New Zealand’s chief executive officer, the precarious nature of structures in the country’s largest affected city, Wellington, is causing delays that are likely to influence the speed of adjusting.
“A high degree of caution is being exercised in evaluating damage, particularly to commercial buildings in the Wellington Commercial Business District (CBD),” Dean said. “Past experience with the Canterbury sequence of earthquakes in 2010, 2011 and afterward, has heightened personal safety considerations.”
A number of the Wellington CBD buildings are being vacated until thorough engineering evaluations can be made. “Of course, this impacts businesses temporarily relocating and/or temporarily closing,” said Dean.
Although some of the building damage appears insignificant, experience has shown the full scope of damage is not always readily apparent, and a more time-intensive engineering analysis may be required. “This is another example of the delays in having all buildings inspected in a short time frame.”
One of the key aspects of this particular earthquake is significant transport route dependency. “Widespread damage—in particular to key infrastructure items such as State Highway One and the main trunk railway line between Christchurch and Picton—will trigger the transport route dependency extension in many policies,” said John Broom, Crawford Forensic & Accounting services manager.
Substantial pressure is being placed on transportation links between the two islands. “The damage to the Wellington Port is likely to take a significant period of time to repair and will thus cause considerable disruption to the movement of freight in and out of Wellington,” he said. “Other dependency issues will also manifest themselves, particularly prevention of access as areas and buildings are cordoned off.”
Extensive area damage affects tourism
Extensive damage issues will become more apparent, depending on the area affected. “Kaikoura is a major tourist attraction with whale watching and other sea tourism attractions,” John said.” Given its location, even though the roads have now reopened, tourism may not return for some time given ongoing aftershocks. A similar impact affected Christchurch after the 2011 earthquake.”
Crawford & Company® New Zealand is an associate of Crawford & Company, one of the world’s largest independent providers of claims management solutions to the risk management and insurance industry as well as self-insured entities, with an expansive global network serving clients in more than 70 countries. The Crawford Solution® offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management, workers compensation claims and medical management, and legal settlement administration. The Company’s shares are traded on the NYSE under the symbols CRD-A and CRD-B.