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Covid-19 Virus

Updated 13 May 2020

This page provides information on how insurance products would generally respond to the situation, and is updated periodically. You can find recent media comment and advisories in our media release section.

Pease note: For official information on Covid-19 please refer to the New Zealand Governments Covid-19 page, or Safe Travel.

The coronavirus called COVID-19, and New Zealand’s response to slow its spread, generated a lot of questions about how it affects insurance cover.



Covid-19 News

08 May 2020

By Tim Grafton, CE Insurance Council of New Zealand

08 May 2020

In this issue: Insurers role in the economic recover after COVID-19; insurers support of collision repairers, latest Canterbury Q1 stats and recent ICNZ submissions.

06 May 2020

As New Zealand moved to Alert Level 3 last week (28 April) the ability to undertake non-essential repairs were able to get underway. To ensure these repairs comply with tighter health and safety requirements, a number of...

23 Apr 2020

In this issue: what Alert Level 3 means for insurers, frequent landlord insurance questions answered, steps being taken to support SME and commercial customers.

What insurers in New Zealand are doing

New Zealand insurers are committed to supporting their customers. In response to Covid-19 all ICNZ’s members have activated their business contingency plans (BCP) to protect their business and staff - ensuring they can maintain their level of service to their customers.

If you experience difficulty in paying your premium, then get in touch with your insurer or broker to see what they can do to help you. Find out more about the support available here.

Below is some information to answer questions that we have been receiving.  If you cant find what you need please contact ICNZ at icnz@icnz.org.nz

 

About insurance and why pandemics aren’t covered

Insurance exists to protect against unforeseen loss or damage.  It takes the form of a contract where one person or business (the insured) agrees to transfer the risk that a range of unforeseen events may happen to a business (an insurer). In return, the insured pays the insurer a fee (a premium) which is the calculation of the frequency of the risk occurring and the potential loss. This is formalised in a legal contract (a policy).

If insurance policies covered every risk, they would be unaffordable. For this reason, policies have limits in place for covered events, and exclude events where the potential for a claim is high, such as high-risk activities while travelling. Policies will also exclude events where the potential loss is extreme or can’t be quantified – such as acts of war or pandemics. We are currently in unprecedented times, but insurance still remains valid and valuable for the risks that are covered within policies.  

To understand more about insurance see our page Understanding insurance – the basics.

 

How insurers can help as Essential Services during Level 4 Alert period

Insurance is identified as an essential financial service during a Level 4 Alert period. This includes businesses that provides services to insurers to help their customers, for example an electrician, plumber or builder can help with emergency and critical safety repairs. For more information, including a full list and details about the way essential service businesses can operate in Alert Level 4, visit the New Zealand Government COVID-19 website Essential Businesses page.

Travel insurance

Travel insurance and COVID-19
  • Most travel insurance policies have exclusions for outbreaks of pandemics, epidemics and/or known events that could lead to a claim.
  • Each travel insurer’s product will be different.
  • Policies purchased prior to coronavirus (COVID-19) becoming a known event may cover travellers who are overseas for coronavirus-related expenses. This will depend on the travel insurance product purchased.
  • Travel insurance policies purchased after COVID-19 became a known event are unlikely to cover travellers who are overseas or who are yet to travel for coronavirus-related expenses. 
  • Coronavirus became a known event for most travel insurers between January 20-31, 2020. Insurers who have adopted known event status for COVID-19 have advice for policyholders on their websites
  • Insurers have continued to update these advisories in response to the changing situation and explain what cover may or may not be available under their policies
  • Travellers whose plans have been disrupted should contact their travel agent, airline or accommodation provider to seek refunds or make alternative arrangements
  • Travel insurers may offer credits or refunds for unused policies and it would pay to ask your insurer if they can offer this. If you can secure a refund it is important to understand that this may not be for the full premium paid because travel insurance offers cover from the date of purchase and not for the travel period alone.

Business interruption (BI)

What is business interruption insurance (BI)?
  • Most BI policies typically cover interruption to a business caused by damage to its assets (as specified in their policy). 
  • Some BI policies may respond to the closure of a business by an authority for a number of risks, including infectious disease, for example Legionnaires.  
  • While specialist cover is available, in New Zealand most BI policies will contain exclusions relating to losses caused by any animal or human disease notifiable under the Heath Act 1956 and the Biosecurity Act 1993.
  • Pandemics are generally excluded because it is not possible to quantify the risk to be able to price it.
  • Because BI policies are tailored to meet each business and its unique needs. If you do not understand how your policy may respond to COVID-19, speak to your broker or insurer for more information. 
How does business insurance work?
  • Insurance policies are tailored to the needs of the individual business. It is not a one size fits all approach, as the insurance needs of no two businesses are the same.
  • Standard commercial insurance policies provide cover against a wide range of risks, including damage caused by fire, flood, losses by theft, accidents involving employees and the need for temporary trading premises in certain circumstances (following severe flood or fire).
  • An adviser or broker will work with the business and advise on the appropriate insurance to suit their needs. Some businesses may have cover in place that specifically provides cover for contingency business interruption arising from notifiable diseases, such as coronavirus, where their premises have been contaminated, but this is not common.

House, Contents and Motor insurance

House, Contents and Motor insurance is not impacted by Covid-19 and still gives you cover to get you back on your feet when the unexpected happens so you can get on with your life.

House and contents insurance

Advice for working from home, unoccupied property and landlords at Alert Level 3 and 4
  • To help stop the spread of Covid-19, many businesses are changing how they work with people working from home.
  • Working from home should be covered by most standard home insurance policies, assuming that the work is office based in nature. 
  • Not all work from home situations may be covered so if you’re unsure check with your insurer.
  • If you need to receive visitors on business matters check with your insurer because there may be some restrictions, such as loss of money and theft being excluded unless there is evidence of forcible and violent entry to the property. 
  • Standard home insurance policies will not provide cover for the costs of cleaning a property should it become contaminated by Covid-19 and require a deep clean.
  • Insurers will take an understanding approach if you are quarantined or stuck abroad and are unable to return to your property within the timescales set out in your policy (normally between 30 – 60 days). However, you should contact your insurer for advice on this and if you are in this situation.
  • If you are a landlord and can’t access your property to complete your regular 3month inspections because you/ your property manager /your tenant is self-isolating, the inspection should take place as soon as is practical after health clearances. Do check with your insurer about your specific requirements and how your insurer is treating it.
How do I inspect my rental property in an Alert Level 2 COVID-19 environment?
  • Regardless of the Alert Level we are at, insurers are still providing cover on the basis that inspections that were due to be undertaken during the period of restrictive travel will resume as soon as it is safe and practicable to do so.
  • Under Alert Level 2, the government has advised we can return to work and have some contact with people outside your bubble if it is safe to do so.  For landlords and property managers, this will mean having health and safety plans and guidelines in place to ensure appropriate distancing is maintained and that the health status of the tenants are checked prior to visiting.
  • Some property managers are completing virtual inspections.  Virtual inspections are a good supplement to record some information a landlord may require but it does not replace a physical inspection which is required in order to meet insurance obligations. 
  • As we move down the alert levels, we recommend you contact your tenant to confirm their health status. If they are unwell or showing any COVID-19 symptoms, then the inspection should wait until after the tenant has been cleared by a health professional.
  • If you are unsure about the requirements under your policy, we recommend you contact your insurer or insurance advisor.

Car insurance

If you need to make a claim during Alert Level 4 and 3 restictions you should also check your motor vehicle policy to understand the standard terms and conditions and call your insurer if you have any questions.

For further information or questions relating to your car or driving please visit the NZTA COVID-19 Frequently Asked Questions page.

At Alert Level 4
  • Should your car WOF fall due during the Alert Level 4 period (from 25 March 2020) your car insurance will still be in place as long as there isn’t an existing safety issue that would mean you might not get a WOF – such as tyres needing to be replaced. You will also be covered in the event of an accident as the cause of the accident isn’t related to a reason why your car might fail a WOF.
  • Insurers will also accept claims where driver licences have not been able to be renewed during Alert Level 4.
  • It will be important to renew both WOF's and driver licences as soon as practical when Alert Level restrictions end.
  • You should also check your motor vehicle policy to understand the standard terms and conditions if our need to make a claim – and call your insurer if you have any questions.
At Alert Level 3
  • If your WOF falls due or your driver’s licence expires during Level 3, your insurer will treat it in the same way as they did at Level 4 (outlined above).
  • It will be important to renew both WOF's and driver licences as soon as practical when Alert Level 3 restrictions end. Again, check your motor vehicle policy to understand the standard terms and conditions if our need to make a claim – and call your insurer if you have any questions.
At Alert Level 2
  • If your WOF or drivers licence expired during New Zealand’s Alert Level 3 or 4 periods it is important that you now renew these during Alert Level 2
  • If you can not renew your licence, WOF or COF then make sure your get in touch with your insurer to let them know.

Construction

Construction insurance policies

Because construction insurance policies traditionally only offer cover for sudden and unforeseen events, gradual damage caused by moisture, wind or direct sun is often not covered which may be an issue for sites that aren't weather tight. Contract works insurance policies can be are very complex in nature. If builders, site managers or principle (owner) have any questions about insurance coverage they should contact their insurer or broker to understand how it may affect their cover.

Other questions

If you have a complaint there are are several steps you can take which are explained on our Fair Insurance Code – making a complaint page.

Life Insurance

Because ICNZ represents fire and general insurance companies we are not able to comment on life or health insurance products. We recommend you contact the Financial Services Council who have issued advice on both Life Insurance and KiwiSaver/Investments which you can find on its website