Canterbury's insurers and the Earthquake Commission are working on a pilot model to find common ground to stop the squabbling on who should pay what in insurance payouts, Canterbury Earthquake Recovery Minister Gerry Brownlee says.
The commission and the insurers have disagreed on the "apportionment" issue over how much each should pay for different quakes causing damage to a single property.
After last month's Budget, Finance Minister Bill English said the Government aimed to speed up quake payouts by ensuring there was better co-operation between insurers, including the EQC.
The hardest thing for many people in Canterbury is waiting for insurers to create greater certainty about payouts.
Brownlee, who has been frustrated by the issue, said insurers and the EQC were now talking.
A working model should be created by next month, he said. "That's certainly what all the parties are working towards."
The main problem was finding agreement between the insurers and the EQC on how damage from the major quakes, including those on September 4,2010, and February 22, June 13 and December 23 last year, should be treated for payouts on a damaged building.
The EQC and insurers use different methods to allocate or attribute damage to specific quakes, resulting in diverging assessments of the value of damage.
Brownlee said EQC cover, and payouts of up to $100,000 plus GST, was triggered each time there was a renewal of an insurance policy and then a fresh quake occurred.
"When there is a body of damage on a building and then there is a further earthquake and the renewal is triggered, then the first $100,000 of that second event then falls to the Earthquake Commission,'' he said.
"In a number of cases, the insurers are saying you [the EQC] have handed it to us [too early]."
Instead, the EQC had to agree on a common methodology instead of relying on multiple insurance policies from different companies that triggered "in and out" on payments at different points.
"What we're working to, and what they've told me they're going to get to, is an agreed methodology for assessment,'' Brownlee said.
"They're doing a pilot with a group of houses working out how apportionment looks ... and then at that point they'll agree to [a method] very quickly."