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Complex claims

The Earthquake Commission is currently working through a number of claims where, for a variety of reasons, settlement is not straightforward. These complex claims take longer to settle. The most common complex claims are:

Multi-Unit Buildings

A multi-unit building is a property where two or more dwellings share at least one common structural element, such as a wall, garage, roof or foundations.

EQC assesses multi-unit buildings as a whole, because the repair strategy for each property is likely to impact on the others.

Find out more: Multi-Unit Buildings

Buildings “written off” by the insurer

For some buildings that have been substantially damaged or destroyed, the insurer will suspend or cancel insurance cover from the date of the event on which this substantial damage occurred. They do this because there is nothing left to insure and insurers may refer to it as a “write-off” or a “total loss”.

If your home is a total loss, EQC and your insurer must agree the date this occurred during the series of earthquakes in Canterbury.

This results in two scenarios:

  1. If EQC and the private insurer agree on the date of the total loss, the policy is suspended or cancelled from that date. EQC is no longer liable for any new or worsening of damage. The reason for this is that after a building has been “written off” as a total loss and must be rebuilt, any further damage to the building will not increase the cost of that rebuild. However, cover may continue for other structures on the property such as garages and sheds, unless your insurance has been suspended or cancelled by you or your insurer.
  2. If there is no agreement with the insurer on which event caused the total loss, EQC can elect to settle based on its determination of which event caused the total loss.

Buildings with an unclaimed event

Where a building has been affected by more than one earthquake, EQC must split the costs of repairing damage across each relevant event (the process known as apportionment). In a small number of cases the method of apportionment has resulted in damage being apportioned to events customers have not claimed for. This results in two different scenarios:

  1. For buildings in the Canterbury Home Repair Programme, the apportionment will make no change to their settlement outcome.

  2. For customers whose claims will be cash settled, the fairest, most equitable way to deal with damage apportioned to an event for which there is no claim, is to proceed with the settlement as though all events had been claimed for. This means the settlement outcome for claims affected by this issue will be the same as for any other cash-settled claim.

Find out more: Visit our apportionment page.

Buildings where there are inconsistencies between multiple assessments

Before the High Court decision in 2011, EQC assessments often stopped once cap ($115,000 including GST) was substantially reached. The High Court Decision in 2011 which resulted in the introduction of apportionment of repair costs across each relevant event, means that some of these early assessments are incomplete and EQC will now use the latest assessment to settle these claims in most cases. This applies whether or not the latest assessment is lower than an earlier assessment, as long as it is complete and complies with current repair strategies. EQC is carrying out a detailed analysis on each of these claims on the reasons for the inconsistencies.

Assessments can vary over time for a number of reasons, including:

  • Repair strategies have changed with new methods being introduced (which can be either less or more expensive than before)
  • The insurer has changed their advice on cost or repair status and the building is no longer over cap
  • Material costs have changed
  • Changes in building codes and regulations
  • Further damage has occurred in between assessments
  • There was damage that was not obvious until repairs started
  • Assessment methods may have changed.

 Find out more: Reassessments

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