land damage 2

Land damage claims to take further 18 months

It will take 18 months to complete claim settlements on land damage for quake-damaged properties owned by residents in the wider Christchurch area, the Earthquake Commission says.

EQC chief executive Ian Simpson said he favoured cash settlements, rather than the Government agency becoming involved in land remediation.

EQC expected to pay about $1.5 billion in total land settlements but most property owners would receive relatively small payments for land damage.

The commission estimated there were 60,000-70,000 properties with claims for land damage on the flat of Christchurch, with another 7000 on the Port Hills.

However, 25 per cent of the claims had already closed with no settlement, as there was no or minimal damage.

The commission was now working on detailing the cost of settlement for the rest and getting those offers out to people.

The minimum EQC would pay was $500 for a claim, while the maximum payout was the market value of the EQC-insured area of the land on the day of the earthquake. The commission had already settled some early claims in the Port Hills.

It would start rolling out payments for flat land claims at the end of March or early April with completion due around the end of 2014.

Simpson said many settlements would be relatively small, to compensate for minor undulations in land or cracking. Homeowners could decide if they wanted to use the cash to have the land repaired or not.

EQC would also cash-settle for more significant land damage that would affect the building platform. The owner could then talk with the insurer about how that EQC compensation money could best be put towards a rebuild of the residence, Simpson said.

The commission was now assessing how difficult it was to fix land damage, so it could make fair settlements.

EQC was not expecting a huge number of higher-cost claims, Simpson said. ‘‘Even for material cracking in the land we’re probably looking at tens of thousands of dollars rather than a full section [cost].’’

Some insurers, including Southern Response (settling the AMI insurance cases) and IAG (with State, NZI and Lantern), have indicated that EQC land settlements should in some instances be used to provide stronger land and foundation bases for a rebuild.

Southern Response chief executive Peter Rose said the insurance claims manager would encourage some customers to sign a ‘‘deed of assignment’’ to cover the repair of significant land damage including lateral spread. The customer would then hand over the EQC money towards a strengthening process.

‘‘[But] we’re only looking toward getting it to where the land damage is such that a level of remediation is required for the building platform,’’ Rose said.


  • The Press
  • Alan Wood
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