Kapiti tragedy

- David Pine, NZIJ Risk Management Ltd


Although we have no first hand knowledge of the insurance held by the various parties, we can make assumptions about how insurance will be of immense help to those affected.
For the three victims of the tragedy, any life insurance that was in force on their lives will be of immeasurable help to their families. It may be possible for debts to be repaid, children cared for, and partners comforted.
Insurance doesn’t replace those who are lost, but it certainly helps those left behind with the grieving process, knowing that money is the least of their concerns. We have seen many times at first hand what a profound difference a life insurance payout can make to the well being of those concerned.

For damage to property, it is likely that the Placemakers store which was damaged by the falling helicopter will have been comprehensively insured. Insurance will most probably be for full replacement value which means that the damage to the building will be completely repaired at no cost to the building owner.

Also it is likely that Placemakers will have insurance to cover damaged stock and fittings, and also loss of profits (sometimes called business interruption) to cover lost income. The latter cover can make the difference for some businesses between surviving a claim and having to close down altogether. Loss of profits cover replaces the income that the business would have earned during the period when they cannot trade. It is likely that Placemakers will be closed at least partially for quite some time, to enable repairs to be completed.
For the house that was damaged by the falling plane, this will almost certainly be covered for full replacement, which will ensure that all damage is fixed at no cost to the owners.

The helicopter and the plane will both have been covered by their respective owners, probably for replacement value. Cover for aircraft is usually placed offshore, often through Lloyds of London, although their local New Zealand agents are likely to deal with the claims, meaning a faster settlement. Policies on both aircraft may contain some loss of profits cover.

Behind many of the headlines we see these days, insurers are quietly helping to compensate people in their time of greatest need.