Financial columnist Janine Starks prescribes 10 steps to deal with financial stress after the Christchurch earthquakes

By Janine Starks*

I really feel the need to send up ten Hail Marys.  It has got to that point where I’ll go to any lengths to avoid being struck by lightning a third time. 

Strike one; our home in the Banks Peninsula village of Akaroa was just bowled after taking a major hit from the September quake.  Strike two; I discover the misfortune of having a second home in the seaside suburb of Redcliffs. Life seems to have gone from splattered red-bricks to splattered red-rocks in a few short months.  I’m now happy to resort to prayer if it means we’ll get a bit of quiet time.  

Even as the aftershocks die down and our nerves settle, the stresses just quietly morph into a new form.  Earthquakes quickly raise financial concerns and nothing beats ‘money’ when it comes to tipping the stress scale.    

For most people, the largest financial worry is their home.  Yes the insurance is in place, but how long will it be until property values return.  Those of us who have settled down can afford to be patient and shrug, but for those who planned on moving on, it’s a far bigger financial sentence.

You have to laugh (or you’d cry), but I’m sure most of Redcliffs and Sumner noticed how quickly local real estate agents Ray White legged-it from their offices.  Honestly, they bolted quicker than Monkey King on Show Day in Addington.  In the financial world, we’re always looking for ‘indicators’ that might signal a lack of confidence in various asset classes.  But never in my life have I physically witnessed a real ‘indicator’ dashing down the street. 

Frozen assets add to stress

With gritted teeth, I now joke about living in a street of $1 houses.  We must all find a way to come to peace with the concept of frozen assets.  At least, once rebuilt or repaired, a property can be lived in and loved again.  It still retains its inherent purpose, unlike many ‘paper’ asset classes which disappear when the indicators turn against them. 

In many suburbs we must say good riddance to the real estate agents, and welcome the information caravans and coffee machines which pitch up on their door steps.  As time moves on, the insurance agents who sit shivering under tents on the sides of grass verges might discover it’s sensible to get closer to their clients and move into abandoned office space.  The same goes for assessors, project managers and the council.              

Seven weeks in, rather than ponder the ‘what ifs’ of the future, the best antidote for financial stress, is to be pro-active about the short term things which are possible to control. 

Whether you’ve lost a home, have damage, lost your job, or are now worried about job security, thinking too far ahead makes the problem seem insurmountable.  Instead, refocus yourself on the very short term – just the next month or two.  Getting back that feeling of control, in some small fashion has a calming effect. 

I’m a great believer that collecting information, record keeping and being pro-active goes a long way in regaining control.  An organised person conquers a problem with far less stress than those who ‘wing-it’

1.      Start a folder: a ring-binder with dividers.  If you home is your financial problem, type up a summary page – your address and contact details; EQC claim number; your insurers details and policy number; bank account details; a full list of contact details for your assessor, claims handler, engineer, builder, moving company, storage unit.  Have it all in one place so you are not scrambling. 

2.      File your paperwork: policy document, latest insurance schedule, any letters or emails from EQC, the title to your property, floor plans of your property if you have them.  Start a section for photos of property damage, contents claim, correspondence with your insurer and assessor.  Have a notes page for writing down the date of phone calls and what was said.  Print off all emails and file them.  Confirm any verbal conversations on email to your claims handler or assessor.

3.      Don’t bother ringing EQC incessantly: you’ll get more and more wound up.  But if you send them anything, call and make sure it’s on your file.

4.      Talk to friends affected by the last earthquake: find out their tips – we are our own experts.

5.      Start collecting information.  When EQC arrive on your doorstep for a full visit, you should be fully armed.  Have copies ready of any building report, building quotes, engineers report, floor plans etc.  What a waste of their time, if they need to explain how a contents claim works.  Every broken item should be photographed and numbered, written up on a schedule, with a quote for replacement.  This is a laborious task, but the internet is a wonderful tool.  Prices of TVs and crockery can all be printed off. If you can’t find the exact model, something close is fine.  If the shop you purchased it from is no longer, retailers in other cities can be helpful. 

6.      Read your policy document: dull as it sounds, check the definition of your ‘home’.  Ring your insurer and check to see whether items like your ‘deck’ are covered. I was told ours wasn’t as we hadn’t declared its size, but we managed to over-turn that.

7.      Find out what EQC don’t cover: with fences, patios, paths, pools, driveways you won’t need to deal with EQC.  Go straight to your insurer to have them repaired.   

8.      ‘Other people’ don’t have priority: its negative thinking and total rubbish.  Those who appear to be making more progress are usually being pro-active and spending some of their own money to get early answers so they can push their insurer into action. 

9.      Get pro-active: don’t sit around and assume your damage is under $100,000.  The 15 minute EQC visit was not carried out by engineers or builders.  My own home in Redcliffs was given category 4 (minor damage, 9 month wait).  Our private engineer confirmed there is easily more than $100,000 of damage. Carrying out your own engineers report can cost $900.  Anyone living on a hill should seriously consider it.   Alternatively go for a builder's report as they can help identify hidden damage.  Don’t assume every builder is busy as specialist companies spend all day doing reports.  Expect a 3-4 week wait (no biggie).

10.  Stay proactive with your insurance assessor: they will take photos and have a good eye, but they are not a builder or an engineer.  View them as a ‘go-between’.  Keep asking what the next step is and what they need from you.  They will bring in a proper building assessor who will price up the damage.  Then they’ll hand over to project managers who organise the repairs, once EQC have paid out.  In the case of a total rebuild, you may be allowed to opt for a full service architect who will project manage as well as provide new plans.     

* Janine Starks is Co-Managing Director of Liontamer Investments. 

Opinions in this column represent her personal views and are not made on behalf of Liontamer.  These opinions are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product.  Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.