How would Bounce have responded to past earthquake events?

We get this question a lot.

The simple answer is that Bounce’s automatic claims payment would have been activated by all the major earthquakes that we have seen in New Zealand over the past decade. This means that we could have supported thousands of Kiwis bounce back to recovery.

The Science

Let’s first look at the science behind Bounce’s claim system.

To ensure fast, fair payments, we use independent and trusted seismic data from approximately 330 GeoNet Strong Motion sensors located around the country. This data allows us to objectively identify areas where customers are highly likely to have extra costs as the result of a quake.

Secondly, payment eligibility is based on shaking intensity, with a metric known as Peak Ground Velocity (PGV). If an earthquake results in shaking of at least 20 centimetres per second in your location, you are eligible to receive a payment from your Bounce policy. PGV takes into account both the depth of the earthquake and the soil structure, meaning that it would consider situations such as the Canterbury earthquakes, where softer soils resulted in greater shaking intensity and damage. Refer to GeoNet for more information GeoNet: Earthquake Intensity.

Bounces' response

Unfortunately, there are a large number severe earthquakes that have occurred in New Zealand recently that we can use to see how Bounce would have responded. The key quakes are:

·       first large Christchurch Earthquake (4 September 2010) the highest PGV measured was 94.5cm/sec (M7.2 and MMI X).

·       second large Christchurch Earthquake (22 Feb 2011) the highest PGV measured was 97.3cm/sec (M6.2 and MMI VIII).

·       third large Christchurch Earthquake (13 Jun 2011) the highest PGV measured was 95.6cm/sec (M6.0 and MMI VIII).

·       fourth large Christchurch Earthquake (23 Dec 2011) the highest PGV measured was 49.6cm/sec (M5.8 and MMI VIII).

·       largest earthquake in recent memory was the Kaikoura earthquake (13 November 2016), and highest PGV was measured at 101.7cm/sec (M7.8 and MMI IX).

Remember that a Bounce policy is triggered by an earthquake with a PGV of 20cm/sec, which means it would have responded comprehensively to these shakes. If we assume Bounce provided cover for just 1% of the market (2,978 policies out of 297,787 dwellings in the Canterbury region) then we would have supported policyholders with the following payouts:

Many of these dwellings would have had traditional earthquake insurance. However, we all know how complex and time consuming it can be to make, process, and receive traditional insurance claims.

Had Bounce been up and running, it’s automatic claims payment system would have insurance payments in bank accounts within days of these major earthquakes, helping Kiwi’s bounce back quickly.