‘Difficult times ahead’
The Financial Services Federation (FSF) says challenges are emerging around replacing and repairing vehicles damaged in the recent extreme weather events that battered large parts of the country.
Its members have received a number of insurance claims and hardship applications following the late January floods in Auckland and Cyclone Gabrielle lashing large parts of the North Island in February.
However, Lyn McMorran, executive director, says the number of people making claims or needing assistance with repayments is expected to increase over the coming weeks as people’s situations become clearer.
“It’s still quite early days to work out what people adversely affected by flooding and the cyclone need but members are already receiving hardship applications,” she explains.
“These are not just from consumers but also from businesses such as commercial vehicle contractors who can’t do their usual work because roads are closed and, in turn, that’s impacting their ability to pay for their truck.
“There are going to be all sorts of issues for consumers and we’re probably yet to hear a lot of it because many people are still digging their way out of the mess left behind by the cyclone.”
McMorran, pictured, notes a lot of the vehicles caught up in the weather disasters would have been under a finance contract or part of a fleet and now the question is how to replace all of those cars and what with.
The debt on any cars that are insured should get repaid, but some people who have lost a vehicle won’t have insurance and that will make the process difficult, especially if they need access to another vehicle.
“We’re starting to see a lot of vehicle insurance claims for write-offs but the ability to provide replacement vehicles is not necessarily there because of supply issues getting vehicles into New Zealand,” adds McMorran.
“Some people may also be changing their vehicle choice following the recent weather events and move away from electric vehicles to something more robust because of the way the roads are.
“Another challenge is around car repairs because insurers need to find more space to get flood-damaged vehicles stored while they await repairs.”
FSF members are already helping people who are having difficulty meeting payments but are still waiting to hear from a lot of consumers. McMorran says they won’t go chasing them at this stage “not knowing what their personal circumstances might be”.
“When consumers sought support during Covid, our members did what they could and people got back on track reasonably quickly.
“The feeling in the industry is the recovery from the cyclone will take longer because of the damage to infrastructure and there is uncertainty around how long it will take to put that back in, or if it will even get back to how it was.
“There are going to be some difficult times ahead. At least once out of the Covid lockdowns life could go on pretty much the same but these latest incidents are going to take years to sort out.”
