Increased Liquefaction Vulnerability (ILV) land damage

 

What is ILV land damage?

ILV is a type of land damage covered by EQC.

In some areas of Canterbury, the 2010-2011 earthquakes caused changes to residential land that mean that some properties are now more vulnerable to liquefaction damage in future earthquakes. Also some properties are now more likely to experience more severe liquefaction damage in future earthquakes.

Diagram showing how the land has changed post-earthquake

You can view a series of videos about ILV here.

How does a property qualify for ILV land damage?

To identify the properties affected by ILV land damage, EQC has collected data from a variety of sources, including:

EQC's engineers have been analysing the data to confirm which properties qualify for ILV land damage.

To qualify for ILV, a property must meet three criteria:

  1. the insured land has material vulnerability to liquefaction damage after the 2010-2011 Canterbury earthquakes; and

  2. the vulnerability to liquefaction damage of the insured land in future earthquakes has materially increased as a result of ground surface subsidence of the land caused by the 2010-2011 Canterbury earthquakes; and

  3. the increase in liquefaction vulnerability has caused a reduction in the market value of the insured land and, in case where the pre-earthquake house on the property remains in place and is not to be rebuilt, also the relevant associated residential buildings, such as the house, garage and garden shed.

The first two criteria, which are the engineering criteria, are assessed at up to 100 year levels of earthquake shaking, or in other words, at the levels of shaking which on average are expected to occur at least once in every 100 years.

The engineering assessments are underpinned by the engineering assessment methodology which was developed by EQC's expert engineering advisors, Tonkin + Taylor (T+T). The Canterbury Earthquake Sequence: Increased Liquefaction Vulnerability Assessment Methodology describes the approach used by T+T to assess whether residential properties in Canterbury satisfy the engineering criteria for recognising ILV land damage. The methodology was peer reviewed by an independent expert review panel, comprising world-leading liquefaction researchers from several universities – Canterbury; California, Berkeley; California, Davis; and Cornell. You can find their report here.

More details of the engineering and valuation assessment processes can be found in the IFV and/or ILV Land Damage Consolidated Policy Statement.

Understanding your qualification pack

1. Sample qualification pack for a customer with a property which qualifies for ILV land damage.

Sample pack consists of:

2. Sample qualification pack for a customer with a property which does not qualify for ILV land damage.

Sample pack consists of:

How is a claim for ILV land damage settled?

Settlements for ILV land damage will be made by cash payment. EQC will not itself be repairing any ILV land damage. This is consistent with how EQC has settled claims for other types of land damage caused by the 2010-2011 Canterbury earthquakes.

When EQC settles ILV land damage, it assesses the customer's loss in one of two ways - either:

  • the amount it would cost to repair the ILV land damage to the land under and immediately around the house (the repair cost), together with any loss of market value of the rest of the insured land as a result of ILV land damage. In other words, this settlement amount would be based on a combination of repair cost and Diminution of Value (DOV); or

  • the loss of market value of the insured land (and, in case where the pre-earthquake house on the property remains in place and is not to be rebuilt, also the relevant associated residential buildings) as a result of the ILV land damage. This settlement amount would be based solely on DOV.

All settlement amounts are subject to the land cap set out in section 19 of the Earthquake Commission Act 1993. The EQC land cover cap is generally the value of the area of damaged land or the value of a parcel of land that is the minimum lot size under the relevant District Plan, whichever is smaller.

EQC's general preference is to settle ILV land damage claims based on the repair cost (together with any DOV of any ILV that is not remediated by the ground improvement methodology).

EQC is settling ILV land damage claims solely on the basis of DOV unless EQC is satisfied that, in accordance with its ILV Policy:

  • the property has not been sold since the 2010-2011 Canterbury earthquakes;

  • there is a repair methodology for the repair of the ILV land damage on the property;

  • the customer intends to undertake the repair of the ILV land damage using the repair methodology within a reasonable period of time; and

  • the repair cost is not disproportionate to the DOV of the property, determined on a case by case basis.

ILV settlements based on DOV

For ILV properties settled on the basis of DOV, payments will be assessed by using a valuation methodology developed by EQC’s valuers and peer-reviewed by an independent expert valuation panel.

For properties where the house that was on the property before the 2010-2011 Canterbury earthquakes is still in place and is not to be rebuilt:

For properties where the house that was on the property before the 2010-2011 Canterbury earthquakes has been or will be rebuilt:

ILV settlements based on repair cost

Under a repair cost settlement, EQC will pay the repair cost of ILV damage to the land area sufficient to provide a building platform for the house. EQC will also pay the amount of the reduction in market value (DOV), if any, of the rest of the insured land area (outside the building platform) as a result of the ILV land damage.

All ILV customers whose settlements may be based on repair cost will be contacted by EQC. They will be individually case-managed, as the situation for each of them varies. Before it can be confirmed that these customers will receive a repair cost settlement, more information is needed to understand their property's current situation.

Further information on ILV repair cost settlements can be found in the Increased Liquefaction Vulnerability (ILV) land damage repair cost settlements fact sheet.

Understanding your settlement pack

For properties where the house that was on the property before the 2010-2011 earthquakes remains in place and is not to be rebuilt:

1. Sample settlement pack for a customer with a property which qualified for ILV land damage and where the house that was on the property before the 2010-2011 Canterbury earthquakes is still in place and is not to be rebuilt. In this sample pack the customer’s ILV settlement is based on DOV and they do not have an outstanding visible land damage settlement.

Sample pack consists of:

For properties where the house that was on the property before the 2010-2011 earthquakes has been or will be rebuilt:

1. Sample settlement pack for a customer with a property which qualified for ILV land damage and where the house that was on the property before the 2010-2011 Canterbury earthquakes has been or will be rebuilt. In this sample, the customer’s ILV settlement is based on DOV and they do not have an outstanding visible land damage settlement.

Sample pack consists of:

For settlements based on repair costs:

Settlement packs for properties settled on the basis of cost of repair (together with DOV of the rest of the insured land) will be particular to the specific property.

How to request a review of the ILV qualification and/or settlement decision

EQC will carry out a review when the customer provides EQC with new information or a different interpretation regarding the qualification and/or settlement decision.

For example, EQC may carry out a review of the qualification decision where the customer provides new engineering information, such as additional drilling information, which can be used to assess whether the land is materially vulnerable and whether there has been a material change in liquefaction vulnerability at the property after the earthquakes.

Examples of the types of supporting information you could send with your request for a review include:

  • information about a possible ILV ground improvement method for the repair of ILV land damage on your property; or

  • information about whether the house has been or will be rebuilt on the property; or

  • information relevant to the pre-earthquake valuation of your property.

You can make a request for a review after the land settlement amount is paid.

To ask for a review, please email us at info@eqc.govt.nz or call on 0800 326 243 between the hours of 7am to 9pm, Monday to Friday, and 8am to 6pm on Saturday.

You can also send us your request with supporting information to:

Land Challenges
PO Box 311
Wellington 6140

Need help?

Information on ways to access help from EQC and other support organisations is available on the Need help? page.

Questions and answers (Q&As)

Visit our ILV Q&As page for more information.

ILV videos

Check out videos relating to the settlement of ILV land damage.

Page last updated: 22 Dec 2016

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