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How EQC settles claims - Q & As

You can access the page detailing how EQC settles claims here.

Questions and Answers

What damage does EQC cover?

The EQC Act covers any physical loss or damage to a home that is the direct result of a natural disaster. Accordingly, in the Canterbury situation, any loss or damage that isn’t directly caused by an earthquake isn’t covered. To take a practical example, where only part of your roof sustained earthquake damage, EQC will only repair or replace that part, even if other parts of the roof had pre-existing problems such as rust or missing tiles.

What does “replacement value” mean?

The EQC Act insures your house against natural disaster, for its replacement value, up to a certain cap (usually $115,000 including GST). The definition of “replacement value” in the EQC Act includes the cost “reasonably incurred” in “replacing or reinstating the building to a condition substantially the same but not better or more extensive than its condition when new” modified as necessary to comply with any applicable laws.

How does the “replacement value” standard apply to relevelling a home?

EQC is required to meet the “replacement value” standard prescribed in the EQC Act. That standard does not mean that EQC must necessarily replace or reinstate a building exactly the same as it was when it was new. This is a particular issue where a house has floors that were not level before an earthquake and the property has previously been altered to accommodate this dislevelment.

If EQC were to completely re-level the floors it could damage the other parts of the house that had previously been altered. In those circumstances a repair of the foundation system that does not result in floors that are level within relevant construction tolerances may be sufficient to meet the requirements of the EQC Act. For each home it will depend on the circumstances of the property. Any repair strategy proposed by EQC must also comply with all applicable laws, such as the Building Act.

How is the “when new” standard applied for older houses?

With a house that was built with materials that are no longer available, EQC will repair the damaged parts of the house with comparable new materials so that those parts are returned to a condition that is substantially the same as, but not better or more extensive than when the house was built. Another issue is how the standard applies where there have been changes to the building laws since the house was built. In this case the insurance will meet the costs of complying with any laws applicable to the replacement or reinstatement of the earthquake damaged parts of the house. 

For example, if the windows of an older type house were damaged by an earthquake, and the Building Code required that replacement windows must have a higher specification than used when the home was built then the EQC insurance would meet the cost of the improvement. EQC’s response and repair strategy will always depend on a raft of facts specific to each home including the nature and extent of the damage and the pre-existing condition of the home.

Will EQC cover the cost of work required on an undamaged part of the home needed to repair earthquake damage?

If repairing an earthquake damaged part of a house means work is also required on an undamaged part of the house, EQC will cover the cost of this work. For instance, if floorboards had to be lifted so repairs can be carried out on foundations, EQC will cover the cost of reinstating or replacing the floor boards.

How does EQC use the MBIE guidance document on repairing and rebuilding houses affected by the Canterbury earthquakes?

The Ministry of Business, Innovation and Employment (MBIE) has published a guidance document to assist with repairing and rebuilding houses affected by the Canterbury earthquakes. This document provides indicator criteria to help when deciding whether a floor damaged by the Canterbury earthquakes should be re-levelled, and if so, by how much. EQC gives due consideration to the MBIE guidance document but does not use the indicator criteria in the guidance document as its only benchmark for whether or not it has fulfilled its repair obligations under the EQC Act.

If a house has suffered earthquake damage that includes the floor being out of level:

  • the fact the floor level is within the MBIE guidance criteria is not a sufficient reason for EQC to not cover the relevelling of the floor; and
  • If relevelling is required, the extent of relevelling will be determined by EQC’s repair obligations set by the EQC Act, not by the MBIE guidance criteria.

Why doesn’t EQC re-level the floors of all homes damaged by the earthquakes?

The EQC Act provides insurance cover for “natural disaster damage”. So in the context of the Canterbury earthquake sequence, EQC will only provide insurance cover for floors that have become out of level as a direct result of an earthquake. The floors of many homes weren’t 100% level before the earthquakes because of the way they were constructed and/or because they have moved and settled since they were built. This dislevelment is not earthquake damage.

Why were no floor level readings taken when my home was assessed?

The majority of homes that have been assessed in Canterbury for earthquake damage have not required a floor level check because there has been no indication of structural damage to the home which required a floor level check to be carried out.

Generally speaking, EQC will carry out a floor-level check in order to confirm earthquake damage that may have been identified following a visual inspection of the property. The inspection may include the assessment of earthquake damage using methods other than a floor level check, such as measurements of bench tops, wall verticalities, window sills, doors, and the opening and closing of joinery and the interaction of foundations with their environment.

Will I be disadvantaged if I receive a cash settlement rather than have a managed repair?

The standard of repair used by EQC is the same whether you are cash settled or if your home is repaired as part of the Canterbury Home Repair Programme. EQC’s cash settlement policy can be found here, along with advice on how to review a claim, if you believe we have missed damage on your property or that the settlement amount is incorrect - http://www.eqc.govt.nz/canterbury-earthquakes/home-repairs/cash-settlement/small-claim-cash-settlement

What should I do if I believe my EQC claim should be reviewed?

There may be situations where you believe we should review your EQC claim because we have missed damage on your property, you don’t agree with the repair strategy we have proposed or you believe the cash settlement amount is not correct. In such situations you should provide us with details supporting your request for a claim review, together with any evidence you have obtained in support of your request. Customers wanting to have their claim reviewed can call 0800 326243 (0800 DAMAGE) or email info@eqc.govt.nz or visit www.eqc.govt.nz/about-eqc/make-complaint 

What type of evidence do I need to provide to EQC to initiate a claim review?

Please provide any evidence to EQC that you have already obtained in support of your request for a claim review. EQC may require further information to determine if a review is required.  The type of evidence you may be required to provide us before we will carry out a claim review will depend on the nature of your request for a review and the settlement position EQC has reached on your claim. A form and fact sheets have been designed to guide you through this process.

By way of example, EQC may request the following evidence (obtained at your own expense) from you:

  • Independent Quote from a Trade Professional
  • An independent quote from a trade professional for the cost of repairing the earthquake damage to your property. Note such a quote must be obtained at your expense.
  • The quote must detail the location and extent of the damage, along with its estimated cost to repair.
  • If the quote contains damage not recorded by the EQC Scope of Works, it must state why the damage is considered to be earthquake-related, and be accompanied by comprehensive photographs showing the location and extent of the additional damage.
  • The quote must include the GST number of the contractor who provides it.
  • The quote must contain a room-by-room breakdown of repair costs, including the cost per square metre of each repair strategy, and the measurements of the damaged areas.

Independent damage assessment from a technical expert (i.e. a structural engineer) may be required in some circumstances. There is a fact sheet to give you more information on this, plus the Guide on the Claim Review form also has information on the situations where you may need engineering reports.

  • An independent damage assessment from a technical expert (i.e. a structural engineer) which details the location and extent of the earthquake damage, along with its estimated cost to repair.
  • If the technical assessment identifies earthquake damage not recorded by the EQC Scope of Works, it must state why the damage is considered to be earthquake-related, and be accompanied by comprehensive photographs showing the location and extent of the additional damage.
  • The quote must include the GST number of the contractor who provides it.

EQC is happy to discuss the type of evidence you have provided and what we may require from you before you lodge a request for a claim review. The type of evidence that EQC may request from you will be assessed on a case-by-case basis and will depend on the nature of your request for a claim review. 
Please do not hesitate to call us if you would like further information.

How do I submit evidence to EQC in support of my request for a claim review?

Your supporting documentation can be submitted to info@eqc.govt.nz or posted to PO Box 311, Wellington 6140. Please include your claim number.

It is important that you understand that simply by submitting this information does not guarantee an additional settlement but that the claim will be reviewed taking the additional information into consideration. A member of EQC’s Customer Services Team will contact you on receipt of any supporting evidence you provide, to acknowledge your request for a claim review, and to provide an indicative timeframe for us to carry out any such review.

What will happen if I do not provide any supporting evidence in support of my request for a claim review?

EQC may decide not to proceed with a claim review if you do not provide any evidence in support of your request for a claim review. EQC will discuss this with you in greater detail if you make a request for a claim review.

Will I be reimbursed for any expenses incurred associated with obtaining evidence in support of my request for a claim review?

In the first instance, any expenses associated with obtaining supporting evidence for your request for a claim review must be obtained at your own expense. EQC may cover these expenses if they uncover legitimate earthquake damage that we did not identify during our assessments of your property, or if we agree with the repair strategy proposed in any report you have commissioned. However, the reimbursement of any such expenses will be determined by EQC on a case-by-case basis.

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