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Frequently asked questions on Kaikoura earthquake insurance claims

ASSESSMENT

1. How does my land damage get assessed?

You will be visited by an EQC assessor first. Depending on the type and extent of land damage, further technical experts such as geotechnical engineers or valuers may be required to visit your property and provide advice to EQC to assist it in determining your land claim settlement.

2. How does my building damage get assessed? In particular, does the assessor always check all areas of the house, including roof and foundations?

The assessment process is designed to ensure earthquake damage to your property is identified and in doing so you receive your entitlement under the EQC Act. In most cases, an assessor will visit your house to complete an assessment of damage. Assessments are aimed at identifying all damage the property has suffered as a result of the Kaikoura earthquake and the best estimate of reinstatement cost. The level of assessment will depend on the extent of earthquake damage presenting e.g. structural, cosmetic, major or minor.

The type of damage that the assessors comes across informs them what areas of your property they should investigate further, e.g. roof framing or roof lining damage could lead to a roof space inspection. Again depending on the damage presenting further technical experts, such as structural engineers, may be required to help determine the level of damage.

3. How do you determine whether a geotechnical or structural engineer needs to be involved in the assessment?

Whether a technical expert needs to be involved in the assessment is decided by the person(s) assessing the damage to the property and will depend on different factors, including the location of the property, and the type and extent of damage.

4. I’m concerned about my completed assessment. What should I do?

If you have any questions or concerns about your assessment, for example you think the assessment missed some damage or the repair strategy isn’t right, you should raise them with your assessor or claim manager in the first instance with supporting descriptions and photographs if available. If you don’t know who your assessor or claim manager is please contact EQC or your private insurer, whichever is managing your building claim.

If once you have raised your concerns with your assessor or claim manager, and you are still not satisfied with the assessment, depending on what exactly is challenged, there may be a number of review options available. In every instance you should discuss the challenge with your assessor or claim manager first to better understand the appropriate next step for your claim.

5. Who pays for the professional reports (e.g. by a structural or geotechnical engineer) which are commissioned by EQC (or the insurer on EQC’s behalf) as part of the assessment process?

EQC or your private insurer may commission a report for a property as part of the assessment to help inform the claim settlement (that is, to ascertain the cause and extent of the earthquake damage, to identify repair strategies, and to cost and quantify the claim). The cost of the report is part of the claim investigation and does not come out of the final settlement amount.

6. What about if I commission an independent report to support my concern regarding inaccurate assessment and/or settlement?

If you commission your own independent report this will be at your expense. EQC or your insurer may reimburse these expenses if we uncover legitimate earthquake damage not identified during our assessments of your property, or if we agree with the alternative repair strategy proposed in the report you have commissioned. However, the reimbursement of any such expenses will be determined by EQC or your insurer on a case-by-case basis.

7. Can specialist reports produced for EQC or the insurer be provided to the claimant?

Yes. EQC and insurers would usually provide all the reports to the insured and if they don’t, the insured can ask for these reports.

Engineering reports commissioned as part of the assessment process are not for consenting purposes and are unlikely to be sufficient for those purposes.

8. There’s a landslip behind my house following the earthquake but I’ve been told I don’t have any land damage on my property. Why is that?

EQCover for land is limited to the following land that is within your property boundary:

  • The land under your home and outbuildings (eg. shed or garage);
  • The land within eight metres of your home or outbuildings; and
  • The land under or supporting your main accessway, up to 60 metres from your home (but not driveway surfacing).

You can find out more information about what land and land structures are and are not covered here

EQCover also includes cover for physical loss or damage that is imminent as a direct result of the natural disaster that has occurred. This form of damage is damage which is almost certain to occur within the next 12 months. Engineers or assessors provide their best estimate of the further natural disaster damage expected to occur to the insured land as the direct result of the original natural disaster, during the 12-month period following that natural disaster.

9. I’ve got a section 124 notice on my property. What should I do?

If your local council issued for your property a section 124 notice under the Building Act, you need to talk to the council about what the notice means and what you need to do to get it removed.


SETTLEMENT

10. What information and supporting documentation will you provide me with when you settle my claim?

Regardless of whether your EQC claim is managed by EQC or your insurer, you will receive settlement documentation which will include the settlement amount and additional information showing how this amount was calculated. For example, this may include a copy of a scope of works which shows the items of damage and the costs calculated to repair them. The settlement documentation may also include any reports that might have been commissioned by EQC or the insurer to help them determine the settlement. 

11. I’ve been paid but haven’t received any supporting documentation which explains how the settlement was calculated. Why is that?

Customers will receive their scope of works/damage report for their property during the process of settling the claim. If your preferred method of contact is post, be aware due to postal delays your documentation may arrive after the settlement amount has gone into your bank account or to your mortgagee. Call your insurer if you have not received your settlement documentation three to five working days after your settlement has been received.

12. Why does my settlement go to my bank instead of me? How I am supposed to be able to repair my damage?

If you have a mortgage and the settlement is over an amount specified by the bank, the payment needs to be made to the bank (which has a financial interest in the property as mortgagee). Contact your bank to discuss how the settlement can be used.

13. How detailed will my scope of works for my house damage be?

Within the supporting documentation you will receive your scope of works which will provide a room by room damage description, the repair strategy and the cost calculated to repair that damage. The scope of works will also cover any additional costs, such as the Preliminary & General or P&G (see Q&A below for more information on what is P&G).

14. I’ve been told that certain costs are covered in P&G as part of my settlement. What is P&G?

In any project there are two types of costs:

  • Variable costs – these costs can alter based on size, length, width. An example of this is an allowance to paint a wall which will vary dependant on the size and height of the wall.
  • Fixed costs – these costs are site- and project-specific requirements that generally involve costs that are fixed in nature. This is why these costs are usually a certain percentage of total cost. These fixed costs are referred to as ‘Preliminary and General’ or ‘P&G’ which are used globally within the construction industry. They can cover a range of matters, such as furniture removal to enable repairs, equipment hire, specialist fees, travel, floor protection, site cleaning, project management and so on.

15. How is remoteness of a property reflected in the final settlement amount, since it’s likely more expensive to get tradespeople and materials to properties in remote areas?

The settlement amount will take into consideration the cost of transporting materials to remote properties and travel for contractors, up to the sum insured.

The settlement amount in some cases has a fixed travel allowance built into the P&G (see Q&A above for more information on what is P&G). This is dependent on the extent of the travel (distance from damage location to where the trade/material may be coming from). In other cases where the travel is substantial and the trade/material is not coming from the local area (i.e. Christchurch to Hanmer), additional hours and mileage on top of the P&G would be allowed for travel and you would see the additional travel allowance in your scope of works document.

16. My TV was damaged by the earthquake and my insurer has asked me to provide them with a proof of loss at my cost. Why is that?

It is standard practice in contents claims for insurers to ask for evidence that you owned an insured asset and that it was damaged.

17. Do I need to sign a full and final discharge of claim form from my private insurer for the EQC part of my settlement?

No. You do not need to enter into a full and final discharge form for the EQC part of your settlement.

Your settlement from your insurer (for the non-EQC or over cap part of your settlement) may require a form of discharge. Your insurer can explain this to you.

18. What’s the difference between undercap and overcap EQC settlement?

If your EQC settlement is under the EQC cap (generally $100,000 plus GST per event) it means it is part of your EQCover or in other words what you are entitled to under the EQC Act. EQC settlement is not full and final. This means that after you had been paid you can always come back to the insurer or EQC, depending who managed your claim, and request a review of your claim.

If the settlement is over the EQC cap then the extent of your cover or final settlement depends on your private insurance policy. For example, if your claim has reached the sum insured, then this is the maximum amount you will be paid regardless of whether it is enough to complete the repairs or not. Insurers may require you to sign a discharge in acknowledgement of the settlement and it is important that you understand the terms of this discharge as in some cases it may be full and final.

19. What can I do if I am not happy with my settlement, for example, if I discover more earthquake damage and/or my settlement amount doesn’t cover all the repair costs?

In the first instance you should discuss this with your claims manager and provide them with any additional information that supports your case. If you don’t know who your claim manager is please contact EQC or your private insurer, whichever is managing your building claim.

If your settlement is under EQC cap (generally $100,000 plus GST per event) and during your repairs you discover more earthquake damage, you can ask EQC or your private insurer, whichever is managing your claim, for a review of the EQC settlement. You should let us know as soon as possible and provide supporting information such as photos. If it’s determined that the damage is earthquake related and wasn’t captured in the original EQC settlement, you will receive an additional EQC payment, provided all other requirements of the EQC Act are met.

If your claim was over cap and your claim has reached the sum insured, then this is the maximum amount you will be paid regardless of whether you find additional damage. Insurers may require you to sign a discharge in acknowledgement of your settlement and it is important that you understand the terms of this discharge as in some cases it may be full and final.

See also answer under question 34 in Customer care section of this document for additional information.

20. What options do I have if my private insurer who is managing my EQC claim and I do not reach an agreement over my complaint?

Each insurer has a complaints process and if at the completion of your process you still feel your complaint is not resolved then you may be able to have this reviewed by the insurer’s external dispute resolution service, which will usually be either Financial Services Complaints Ltd (FSCL) or the Insurance & Financial Services Ombudsman Scheme (IFSO Scheme), depending on which scheme your insurer belongs to. Ask your insurer for a copy of their disputes process.

If your complaint is based on the legal interpretation of the EQC Act, your external disputes option is the Office of the Ombudsman. Your insurer will tell you whether your dispute relates to the legal interpretation of the EQC Act and let you know who to contact.
For more information on the complaints process visit www.eqc.govt.nz/kaikoura.
 

POST SETTLEMENT

21. I don’t know how to get land fixed – can you help?

You will receive a settlement pack which will include information about the type of damage to your land and information on some potential repair methods for some types of land damage.

22. Can I do the land repairs myself?

You may be able to carry out some repairs yourself, after you have received your settlement payment. However, we recommend that you get advice from an appropriately qualified person before arranging the repairs, to discuss the approach to the repair, whether any consents are required, and whether there are any other legal requirements that need to be adhered to.

If you need to carry out urgent repairs to your land damage to make your property safe, before you receive your settlement, please contact EQC before you start. If repairs have already been completed before EQC has assessed the property, we may not be able to assess whether the land
damage was caused by an earthquake and may not therefore be able to include the damage in the settlement.

23. Can I repair my house myself?

It is up to you how you manage the repairs of your home once you receive the cash settlement. However, you should ensure that regardless of the option you choose, building regulations are followed.

The Ministry of Business, Innovation and Employment (MBIE) has prepared a guide which is designed to help you plan and manage the rebuild and repair of your home. You can find the guide “Rebuild with confidence - A guide for homeowners rebuilding after the Hurunui/Kaikoura Earthquake” on the MBIE website: www.building.govt.nz/getting-started/your-rights-and-obligations/homeowner-rights-and-obligations/rebuild-with-confidence/

24. What happens to my insurance cover once I have been paid my settlement?

You should talk to your private insurer. If your home is repairable and your settlement is below the sum insured figure, generally cover will continue at a reduced sum insured. If your home is deemed uneconomic to repair, or significantly damaged, then further insurance cover may not be available.

It is important that the settlement payment is used for the purpose of repair or replacement of damaged property. Any future insurance claims or cover may be affected if your settlement payment is not used for this purpose.

25. When does EQCover reinstate?

EQCover reinstates following each natural disaster event. There are, however, circumstances where EQC may limit cover or cancel cover. You can find out more detail in the ‘Householders Guide to EQCover’.

26. Will I keep my insurance cover if my sum insured is less than what my damage is? Can you provide some guidance on what I need to repair first to keep insurance cover as some damage is likely to be more serious than other damage?

You will need to talk to your private insurer about ongoing cover in this situation. General guidance on priorities is to make your home warm and weathertight as well as structurally sound. 

 


PRIVATE INSURERS AS EQC’S AGENTS

27. How is EQC ensuring that insurers who are working as EQC’s agents are appropriately trained and can therefore assess and settle the damage in accordance with the EQC Act?

The correct understanding and application of the EQC Act has been fundamental for managing claims for the Kaikoura earthquake since the Memorandum of Understanding between EQC and insurers was signed in December last year. To ensure that customers receive their full entitlement, EQC has been providing training for insurers on applying the Act. Dedicated EQC subject matter experts have also been based in some of the insurers’ offices to provide oversight and advice on the claims management process and assist with individual customer claims. 

In addition, information has been made available to insurers who are able to approach EQC for guidance and advice on applying the Act at any time. 

This training and advice on the Act has been used to develop the ‘EQC Claims Manual for Insurers’which continues to be updated and expanded regularly. The Manual sets out policies on how EQC applies the EQC Act. 

 

28. I’m not happy with the work my private insurer is doing on EQC’s behalf. What can I do about it?

All private insurers have internal complaints processes as well as belonging to external dispute resolution schemes. In the first instance, contact your private insurer and advise you wish to make a complaint. For more information on the complaints process visit www.eqc.govt.nz/kaikoura.

29. Can I increase my sum insured or get new insurance cover with my private insurer?

This is very case specific and would depend on location, type of damage to the property, intention to reinstate damage, etc. You would need to speak directly to your private insurer and provide information on this to get an answer on your property.

It is typical for private insurers to temporarily stop offering new insurance in affected areas following a widespread event such as flood or earthquake.

When it comes to house insurance, homes that are already insured should remain insured, and the private insurer will likely offer to renew cover at the anniversary date.

Once the area is back to normal (repairs have taken place, and no further threat of a recurrence of the event) the restrictions are usually lifted and aside from asking additional questions relating to damage to the home, private insurers will usually be prepared to provide cover to the majority of homes again. 

Each private insurer will have a different approach and underwriting criteria but will likely look to support their existing clients in the area.

 


TIMEFRAMES

30. I haven’t had my assessment yet. When can I expect it?

EQC and insurers prioritised properties with the most serious land and building damage, as well as properties owned or lived in by vulnerable people. This means our focus has been first on hardest hit regions i.e. lower Marlborough, Kaikoura and Hurunui. We recognise that there is still some work to be done before everyone’s claim is assessed. We want to assure those customers who have not yet had an assessment that they should expect one very soon. We are on track to complete all assessments by the end of this year.

31. When should I expect to receive my settlement following an assessment?

The length of time it may take between your initial assessment taking place and receipt of your settlement amount can vary depending on a number of factors. For example, if your property requires further expert input (e.g., roofing expert, structural engineer, etc.), then this can take time to arrange and have these reports finalised. Also those properties with complex or major damage will generally take longer to settle than those with simple and minor damage. While there is no fixed time that this can take due to the variables of each claim, your insurer should keep you up to date on what is happening with your settlement and you should contact them if you require an update.

32. When can I expect my settlement?

EQC and private insurers are working towards having three quarters of residential settlements completed by the end of 2017. We expect for the remaining customers to have their outstanding EQC claim resolved in early 2018.

 


CUSTOMER CARE

33. Can my claim be prioritised?

EQC and private insurers are prioritising properties with the most serious land and building damage, including properties owned or lived in by vulnerable people, e.g. if you are an older person, have small children, disabilities or health issues. If you meet these criteria, please contact your claim manager. If you don’t know who your claim manager is, please contact EQC or your private insurer, whichever is managing your building claim.

34. I’m not sure what to do with my insurance claim. Where can I go for advice if I’m struggling to
make a decision?

You should first contact your claim manager. If you don’t know who your claim manager is, please contact EQC or your private insurer, whichever is managing your building claim.

In addition, central and local government have set up earthquake support navigators in Hurunui, Kaikoura and Marlborough regions. You can contact them if you need help or support with any concerns you may have that are affecting your recovery, including insurance claims. To get in touch with them, contact your local council for details or call the Canterbury Support Line on 0800 777 846. The Support Line is open 24 hours every day.

35. Where can I get independent legal advice?

The government is funding a free and independent legal advisory service to assist Hurunui, Kaikoura and Marlborough residents with their insurance claims following the November 2016 Kaikoura earthquake. If you want to contact this service, knowns as the Residential Advisory Service (RAS), call on (03) 379 7027 or 0800 777 299.

36. What type of repair is considered as urgent repairs?

Urgent or emergency repairs are work that’s needed to make your home safe, sanitary, secure and weathertight. Any reimbursement for urgent repairs will depend on the acceptance of a valid claim in accordance with the EQC Act. Examples of urgent repairs include getting essential services like toilets and water systems up and running; temporarily patching your roof to prevent further leaks; or taking down damaged and structurally unsafe chimneys to prevent it from further damaging your house.

You should discuss the specifics of any required urgent repairs with the organisation managing your claim. 

37. Who pays for my temporary accommodation if I need to move out for my repair/rebuild?

If you need to move out of your home for the repair or rebuild process, you should talk to your private insurer. Most home and contents policies have benefits which will help pay for temporary accommodation in these circumstances. Each policy wording will differ so you should check with your private insurer.
Key points from Home policies:

  • Contact your insurer first
  • The home needs to be uninhabitable due to damage from the earthquake
  • There may be cover for both you and your domestic pets – each policy is different, so check
  • You could still be covered, even if the damage to your house is under EQC cap of $100,000 plus GST
  • Each insurers policy wording as to what exactly they will cover may be different, it’s important that you talk to your insurers before incurring any costs.

Residential body corporates should contact their insurance broker, if they have one, or their private insurer directly.

38. There have now been multiple earthquakes in my region following the 14 November 2016 earthquake. How do I know when to lodge a new claim?

If you have sustained damage to your property from a new earthquake you should always lodge a claim with EQC or your private insurer. If there is earthquake damage to your land, then you need to lodge a claim with EQC directly.
You have up to three months following the natural disaster event that damaged your property to notify EQC or your insurer of the damage. Your claim won’t be valid if the notice is given after the three month deadline. So you should let us know about the damage as soon as you can.
There are a number of ways you can lodge a claim with EQC:

  • Complete the online form at www.eqc.govt.nz
  • Call us:
    • within New Zealand: 0800 DAMAGE (0800 326 243)
    • from overseas: +64 4 978 6400 or +64 4 978 6401

You only need to lodge one claim with EQC to cover damage to your home, contents and land. For contents, there is an additional form to complete.

 

 

 

 

 

 

Download a PDF version of these questions and answers here.

 

 

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