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IFV and ILV

Properties with both IFV and ILV land damage

There are some properties which have both IFV and ILV land damage as a result of the 2010-2011 Canterbury earthquakes. EQC began making settlement payments for these claims in September 2016 and expects to settle all remaining ones in 2017.

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

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 rebuilt:

1. IFV and ILV land damage only. Sample settlement pack for a customer with a property which qualified for both ILV and IFV land damage, and where the house that was on the property before the 2010-2011 Canterbury earthquakes is still in place.

The IFV and ILV settlement is based on DOV. The customer does 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 and will be rebuilt:

1. IFV and ILV land damage only. Sample settlement pack for a customer with insured land which qualified for both ILV and IFV land damage, and where the house that was on the property before the 2010-2011 Canterbury earthquakes has been or will be rebuilt.

The IFV and ILV settlement is based on DOV. The customer does not have an outstanding visible land damage settlement.

Sample pack consists of:

Questions and answers

How does a property qualify for both IFV and ILV land damage?

IFV and ILV are two different types of land damage. Each land damage type is assessed under their own assessment methodology and the property will have qualified for both. Assessment methodologies for IFV and ILV land damage can be found on the IFV and ILV web pages.

How is the Diminution of Value (DOV) settlement amount for both IFV and ILV calculated?

To assess the amount of the reduction of market value due to both IFV and ILV land damage on the property, EQC’s valuers:

  1. assess the DOV due to the IFV land damage.
  2. assess the DOV due to the ILV land damage.
  3. add together all of one DOV and a proportion of the other DOV. The appropriate proportion is assessed in accordance with the IFV/ILV DOV methodology.

EQC’s valuers consider that simply adding together all of the IFV DOV and all of the ILV DOV would overcompensate for the combined IFV and ILV land damage. This is why they add together ‘all of one’ DOV but only ‘a proportion’ of the other DOV.

EQC’s valuers consider that buyers and sellers are likely to regard the increase in flooding vulnerability and the increase in liquefaction vulnerability as together impacting the future vulnerability of the property.

For more detail on how DOV is assessed for properties where the house that was on the property before the 2010-2011 Canterbury earthquakes is still in place, and the property has both IFV and ILV land damage, see the fact sheet Diminution of Value due to both Increased Flooding Vulnerability and Increased Liquefaction Vulnerability land damage (where the house is still in place) and the IFV/ILV DOV methodology - Diminution of Value Methodology for properties with both Increased Liquefaction Vulnerability and Increased Flooding Vulnerability.

For more detail on how DOV is assessed for properties where the house that was on the property before the 2010-2011 Canterbury earthquakes has been or will be rebuilt, and the insured and has both IFV and ILV land damage, see the fact sheet Diminution of Value due to both Increased Flooding Vulnerability and Increased Liquefaction Vulnerability land damage (where the house has been or will be rebuilt) and the IFV/ILV methodology - Diminution of Value Methodology for properties with both Increased Flooding Vulnerability and Increased Liquefaction Vulnerability.

Are property owners expected to repair both types of land damage?

If the settlement amount is based on DOV, the owner may wish to use the settlement amount to mitigate the effects of any future flooding or liquefaction damage. But as the settlement amount is based on DOV, there is no requirement to do so. Future EQC cover for the property will not be affected.

However, if the settlement amount for the IFV or the ILV land damage is based on the repair cost, then future entitlement to EQC cover may be affected if the payment is not used for the repair purpose.

Will having both IFV and ILV land damage impact on the insurability of the property?

In general, if the customer has valid fire insurance with a private insurer then the property is covered by EQC. A customer should discuss with their private insurer whether their future insurance is impacted by the land being confirmed as having suffered IFV and ILV land damage.

Why has it taken so long for EQC to settle land claims for both IFV and ILV land damage?

It is the first time anywhere in the world that IFV and ILV land damage have been recognised and are being settled. A huge amount of modelling and analysis by engineers and assessments by valuers has been undertaken to enable EQC to assess and settle claims with IFV and/or ILV land damage.

EQC also sought a Declaratory Judgment from the High Court to confirm that IFV and ILV were forms of natural disaster damage under the EQC Act, and that DOV is an appropriate form of settlement in certain situations. This was so that EQC customers could be confident their land settlements are soundly based.

How can I request a review of my settlement?

Information about the review process is available on the IFV and ILV pages.

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