Pegasus Post: May 17, 2016

PEGASUS POST Tuesday May 17 2016 7
EQC UPDATE KEEPING YOU INFORMED | MAY 2016
EQC’s approach to
its repair obligations
Land settlements update
Keith Land, EQC Head of Canterbury Land Settlement
EQC is now working on the remaining eleven percent of
green zone properties and red zone properties (not owned
by the Crown), which still need their land claims resolved.
“From a total of 73,000 such properties which had land claims,
there are now around 8,000 where the land claims still need to
be settled by EQC,” says EQC Head of Canterbury Land
Settlement, Keith Land.
This year EQC is aiming to complete these remaining land
damage settlements, with the majority of work focusing on
claims for Increased Liquefaction Vulnerability (ILV) and
Increased Flooding Vulnerability (IFV) land damage.
As of early May, 60 percent of potential Increased Flooding
Vulnerability (IFV) customers (9,600) have had their IFV claims
resolved. This also includes any outstanding visible land
damage settlements these customers may have.
Together with resolving remaining IFV claims, the priority now
is on settlements for the around 4,400 ILV customers. Some
properties have both ILV and IFV land damage.
“We’re on track to start making the first payments to ILV
customers from late June,” says Mr Land.
Settlements for ILV land damage will be made by cash payment,
in line with how IFV and other types of land damage from the
2010-2011 Canterbury earthquakes have been settled to date.
ILV settlements will be based on one of two approaches: repair
cost, or reduction in market value of the property due to ILV land
damage – also called Diminution of Value (DOV). Information on
ILV, and details of these settlement approaches, including
answers to a number of questions, can be found on the EQC
website at www.eqc.govt.nz/ILV
ILV land damage settlements on the basis of DOV
EQC expects that most ILV properties will be settled solely on the
basis of DOV. This is because, where the house has remained in
place after the earthquakes (as many have), there will not
generally be repair methods available to repair ILV damage on the
property. The first payments made in late June will be to those
customers with ILV land damage whose settlements are based on
DOV. “The ILV DOV approach and settlement amounts will be
similar to how we’ve been handling IFV claims,” says Mr Land.
Claim
deadline
looming
Christchurch residents whose
homes suffered damage
in the 29 February 2016
earthquake still have time
to lodge a claim with EQC.
The deadline for lodging
a claim is 30 May 2016.
This deadline does not stop
you from lodging a new claim
with EQC if your dwelling
incurs new damage as part
of recent or future quakes.
EQC encourages anyone
whose home suffered
damage in this event to make
a claim even if the damage
appears minor.
“We’ve been working closely with customer advocates groups to
make sure the settlement communications our customers receive
is clear and helps them understand our decision.”
ILV land damage settlements
on the basis of repair cost
Work is underway to determine the settlements for ILV
customers whose payments can be based on repair cost.
“We are planning to start contacting customers in early June
who, based on the information we have to date, have the
opportunity to complete a ground repair on their property to
address the ILV land damage,” says Mr Land. Before the repair
cost settlements can be made, EQC will be working closely with
these customers to understand their plans for rebuilding on the
site and whether the plans include any ground repair.
“We will have a dedicated team case managing these customers
to ensure EQC has a good understanding of their situation and
they are kept up-to-date with their claim’s status,” says Mr Land.
Land assessments and settlements in general
“We have identified different types of land damage – visible land
damage, IFV and ILV. For each type of land damage, we use a
range of assessment processes that allow the appropriate
settlement for each customer and are consistent with the
legislation in place.
“Each property is different and is assessed on a case-by-case
basis, so one customer’s settlement is not indicative of
another’s,” says Mr Land.
For more information on the approach to land claims and their
settlement, visit www.eqc.govt.nz/land.
“We also have an open and robust review process in place for
those customers who want us to review our decisions on
whether their insured land has damage and/or the settlement
amount paid,” says Mr Land.
Check out www.eqc.govt.nz/landreview for more information
on land settlement review.
Land settlements for red zone properties
EQC is assessing all residential land claims across Canterbury
in a consistent way – whether they are green zone properties or
red zone properties.
The Government’s decisions related to the red zone are separate
from EQC’s decisions related to the assessment and settlement
of land damage claims.
As agreed with CERA and now Land Information New Zealand
(LINZ), EQC’s priority continues to be to resolve land damage
claims for properties in the green zone and those in the red
zone, whose owners did not accept a Crown offer.
“However, we continue to work with LINZ, which has taken over
management of the around 7,000 Crown owned red zone
properties. We expect to agree a settlement approach with LINZ
in the second half of 2016, applying the same policies EQC has
used to settle green zone claims,” says Mr Land.
EQC has so far received just
over 10,500 building, contents
and land claims since the first
quake on Valentine’s Day.
People can lodge claims
with EQC online at www.eqc.
govt.nz/claims via email on
info@eqc.govt.nz or by calling
0800 DAMAGE (0800 326 243).
The EQC call centre is open
7am to 9pm Monday to Friday
and 8am to 6pm on Saturdays.
There has been some discussion about how the Earthquake
Commission meets its obligations under the Earthquake Commission
Act (EQC Act) following the release of the Joint Statement agreed
with a group of Canterbury homeowners, the EQC Action Group.
Information on what the joint statement means for customers
and how customers can request a review of their claim can be found
at www.eqc.govt.nz
EQC acknowledges that every homeowner affected by earthquake damage
faces a set of circumstances specific to their property and that a different repair
strategy is likely to be applied in each case. That said, EQC uses some general
principles when making its decisions. EQC insures an earthquake-damaged
house for its replacement value up to a certain cap, usually $115,000 including
GST, according to the EQC Act. Given there has been some confusion about
what “replacement value” means, it’s worth having a close look at the
definition in the EQC Act, which includes three main elements:
1. the costs which would be reasonably incurred
2. in reinstating the building to a condition substantially the same as but not
better or more extensive than its condition when new
3. modified as necessary to comply with any applicable laws.
Some of the commentary following the Joint Statement focused on the
concept of “when new”, which refers to when the house was new. While
“when new” is one element, EQC needs to take into account each of the
three main elements, when meeting its obligations under the Act. For
instance, the concept of when new needs to be seen in light of complying
with any applicable laws.
How ‘replacement value’ may apply in practice
Example 1
Following an earthquake, a brick chimney falls through the corrugated iron
roof of a 1900s-era villa.
The falling chimney smashes through the ceiling, shattering a ceramic light
fitting that was already badly deteriorated prior to the earthquake.
To repair the roof, the corrugated iron in the area where the chimney fell
would be replaced with new corrugated iron. If corrugated iron of the same
type as the damaged iron is not available because it is no longer
manufactured, the new corrugated iron would be a modern product, which
matches as closely as possible the profile of the damaged corrugated iron.
In some situations, the new corrugated iron may be coloured steel or
the corrugated iron may need to be repainted to match the colour of the
existing roof.
EQC may also need to reinstate or replace non-damaged parts of the roof
that need to be removed in order to repair the earthquake damage, such as
the iron ridging on the roof peak.
The repair work to the roof would be carried out to ensure the work meets
applicable laws such as the performance standards in the Building Code.
The light fitting would be replaced. If the existing wiring couldn’t be safely
reconnected to the light fitting then an Electrical Safety Inspection would be
required. The wiring would need replacing to a point where the electrician
determines it can safely be reconnected, and to meet any legal requirements
for that work.
Example 2
An earthquake damages the so-called ‘rubble foundations’ a home is built
on. If the foundation can be repaired so that the foundation is in a condition
substantially the same as when it was new and the repair work complies with
applicable laws, the foundation repair will meet the “replacement value”
standard. In other cases, to meet the standard of applicable laws, part or
all of the foundation may need to be replaced. EQC considers each repair
strategy based on the facts specific to each home. Individual foundation
repairs are dependent on the nature of the foundation, the type of
earthquake damage suffered and the make-up of the concrete.
Customers can request a review
If any customer believes EQC has missed earthquake damage to their home,
disagrees with the repair strategy EQC has proposed, or believes their
settlement amount is not correct, they can use EQC’s standard processes to
request a review of their individual claim on 0800 DAMAGE (0800 326 243)
or email info@eqc.govt.nz
0800 DAMAGE (0800 326 243) OR VISIT WWW.EQC.GOVT.NZ