When David Meets Goliath: How FrankIQ Can Help Level the Playing Field

What New Zealand homeowners need to know about proving insurance claims and how to prepare.

The High Court's 2024 decision in IAG New Zealand Ltd v Degen has clarified some important rules about insurance claims, but it's also highlighted the significant challenges ordinary homeowners face when dealing with major insurers. Here's what the decision means for you and how FrankIQ's services can help you better prepare for potential claims scenarios.

What the Court Decided

After the Canterbury earthquakes, the specialist Canterbury Earthquakes Insurance Tribunal (CEIT) made two significant rulings to help earthquake victims. It required IAG to pay repair costs upfront when homeowners signed building contracts, and found that insurers should properly assess claims rather than leaving all the proof to traumatized homeowners.

The High Court overturned both decisions. The law now clearly states that homeowners must prove their losses, and insurers only pay for costs as they're actually incurred - typically as invoices are submitted during repairs.

The Challenge You Face

While these legal principles may make sense in theory, they create practical difficulties for homeowners facing large claims:

Financial Pressure: Proving a complex claim often requires engineers, quantity surveyors, and building experts. These can cost thousands or tens of thousands of dollars before you've received any insurance payout. Meanwhile, insurers have established relationships with experts and legal teams.

Information Gap: Insurers handle claims daily and have extensive data about repair costs and construction standards. As a homeowner, you're navigating this complex world possibly for the first time, often while dealing with the stress of property damage.

Time and Persistence: Insurance companies have dedicated claims teams and can afford lengthy disputes. For homeowners, a prolonged claim process means continued uncertainty, displacement, and mounting expenses.

Emotional Impact: What's routine business for insurers is often a life-changing crisis for homeowners. The emotional toll of fighting for your claim can be substantial.

How FrankIQ Helps You Prepare

Understanding that the burden of proof is on you, FrankIQ provides tools and services designed to help you better prepare for potential claims situations:

1. Policy Understanding Through FrankIQ Analysis

Our specialized AI analyses your specific New Zealand insurance policy and provides you with a comprehensive report that highlights:

• What appears to be covered under your policy
• Potential exclusions that could affect claims
• Your obligations as a policyholder
• Common issues that may arise during claims

This educational analysis helps you understand your policy in accessible language, potentially reducing the "information gap" between you and your insurer.

2. Ongoing Support Through FrankChat

Understanding your policy once may not be sufficient. FrankChat, our AI assistant trained on your specific policy information, allows you to:

• Ask questions about coverage throughout your policy period
• Understand notification requirements and timeframes
• Clarify maintenance obligations
• Get guidance on policy-related matters as they arise

This ongoing access helps you stay informed about your obligations and coverage throughout your policy term.

3. Documentation Tools: Maintenance and Inventory Apps

The Degen decision emphasizes that homeowners must prove their losses. Our apps are designed to help you create the documentation that may be crucial in a claims scenario:

Maintenance Scheduling App:

• Track and record property maintenance activities
• Create timestamped records of gutter cleaning, heating service, smoke alarm checks
• Build documentation that may counter "lack of maintenance" challenges

Inventory App:

• Photograph and catalogue your contents with values and dates
• Create comprehensive records of your possessions
• Maintain up-to-date documentation that could support contents claims

4. Expert Claims Advocacy Support

When you've prepared using our tools and face a challenging claims situation, our experienced claims advocates can:

• Provide initial consultation (one free hour for annual members)
• Work with the documentation you've gathered through our preparation process
• Assist with dispute resolution at discounted rates (25% off standard consulting fees)
• Help navigate the claims process with the benefit of your preparation work

Your Rights and Protections Remain

Despite these preparation tools, you still have important rights and free resources available:

Free Dispute Resolution: The Insurance & Financial Services Ombudsman (IFSO) investigates insurance disputes at no cost. Contact us if your insurer isn't treating your claim fairly and we can assist you with drafting submissions to them.

Fair Treatment Standards: Insurers must comply with the Fair Insurance Code and have legal duties of good faith and fair dealing.

Consumer Protection Laws: The Fair Trading Act and other consumer laws may apply to your situation.

The FrankIQ Approach: Preparation Before Problems

The Degen decision makes clear that homeowners bear primary responsibility for proving their claims. Rather than waiting for a crisis, FrankIQ's approach focuses on preparation:

1. Understand your policy before you need to use it
2. Document your obligations and compliance throughout your policy period
3. Create evidence of your property condition and contents
4. Access expert support when needed, with the benefit of thorough preparation

Investment in Preparation

FrankIQ's comprehensive preparation service costs is a very affordable and sensible early option. Consider this investment against the potential costs that could arise from claim complications due to insufficient understanding or documentation.

As noted in the Degen decision context, proving complex claims often requires expensive expert assessment. Better preparation through understanding your policy and maintaining proper documentation may help you navigate claims processes more effectively.

Moving Forward with Confidence

The Degen decision reflects the reality that insurance operates as a contract where you must prove your loss. While this creates challenges, especially against well-resourced insurers, preparation can help level the playing field.

FrankIQ's services are designed to help you:

• Better understand what you're entitled to under your specific policy
• Maintain the documentation that may be crucial if claims arise
• Access expert support when you need it most

We believe insurance should provide security and peace of mind. Our goal is to help you be better prepared should you ever need to make a claim.

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Disclaimer: FrankIQ's analysis and services provide educational information only and are not legal or financial advice. We encourage you to clarify any important matters with your insurance broker or legal advisor. Consider your individual circumstances and seek professional advice where appropriate or ask to speak with one of our consultants.