ILV - Q&As

Questions and answers (Q&As) about Increased Liquefaction Vulnerability (ILV) land damage

This section includes Q&As on the following topics:

Qualification for Increased Liquefaction Vulnerability

How does a property qualify for ILV land damage?

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

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

  3. the increase in liquefaction vulnerability has caused a reduction in the market value of the property (i.e. of the insured land and relevant associated residential buildings combined).

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.

My property experienced liquefaction during the earthquakes. Does this mean my property qualifies for ILV?

Not necessarily. It is possible a property experienced significant liquefaction induced damage as a result of an earthquake but does not qualify for ILV. This could be because, for example:

  • the land is not materially vulnerable to damaging liquefaction in at up to 100 year levels of earthquake shaking; or

  • the land is materially vulnerable to damaging liquefaction, but has not been made materially more vulnerable as a result of the subsidence caused by the 2010-2011 Canterbury earthquakes.

A property will only qualify for ILV where subsidence to the insured land has caused it to become materially more vulnerable to liquefaction. If the insured land was already prone to liquefaction before the earthquake and the vulnerability has not changed, then it won’t qualify for ILV.

My land dropped during 2010-2011 Canterbury earthquakes. Am I entitled to cover for this?

Not necessarily. The land does not have ILV damage if land has dropped in elevation, but it:

  • is not materially vulnerable at up to 100 year levels of earthquake shaking; or

  • the vulnerability to liquefaction causing damage has not materially increased.

Whether or not ILV occurs at each individual property will depend on:

  • soil characteristics;

  • soil layering;

  • groundwater conditions; and

  • the amount of ground surface subsidence.

My house got damaged because the land dropped during the 2010-2011 Canterbury earthquakes. Does settlement of ILV land damage cover the damage to my house?

EQC settles building, contents and land damage separately. Any damage to your building as the direct result of the Canterbury earthquakes is paid under the building claim separately to your ILV land damage.

I want to get a copy of the map that shows all properties that have been assessed for ILV and have been confirmed as having or not having ILV.

The relevant map of properties can be found here.

My house shakes when a truck drives past. Is this because of ILV land damage?

There may be many reasons why your house may shake or vibrate when heavy vehicles drive by. These could include the foundation and structural elements of your house, the soils beneath your house, the roadway structure and your proximity to it, and the type, weight and size of the vehicle.

However, in most cases the increase in shaking and vibration following the Canterbury earthquakes is due to uneven surfaces and other damage to roads.

If you have concerns about whether your property is safe you should get a professional structural engineer to check it for you.

My property has ILV land damage. Is my house safe?

ILV land damage means that engineers believe your property is more vulnerable to liquefaction in a future earthquake. It is not an assessment of the structural integrity of your home.

If you are concerned about whether your house is safe you should get a professional structural engineer to check it for you.

What properties were being considered for ILV?

All TC1, TC2, TC3 and flat land red zone residential properties were considered to determine whether or not they qualified for ILV land damage. This totaled to around 140,000 properties.

Assessments of ILV land damage for rural and Port Hills residential properties will be done on a case by case basis if required.

How many of the properties you previously identified as potential ILV have ended up qualifying for ILV?

EQC wrote to approximately 8,500 customers to advise them that their properties potentially qualified for ILV land damage, but that further engineering and/or valuation work was required to confirm this.

Following completion of the ILV assessment process, approximately 4,400 properties (including green zone properties and red zone properties not owned by the Crown) have qualified for ILV land damage.

When can I expect to hear from EQC whether or not my property qualifies for ILV land damage?

EQC has sent ILV qualification packs to all of the affected customers in 2017.

Why were properties assessed at up to 100 year levels of earthquake shaking when determining whether they qualify for ILV? What do these levels of earthquake shaking look like?

The selection of up to 100 year levels of earthquake shaking is consistent with the approach taken in New Zealand for other natural land hazards under the Building Act 2004 and the Resource Management Act 1991. A 100 year level of earthquake shaking is similar to the levels of shaking experienced during September 2010 earthquake. It’s important to note that not all properties experience the same levels of shaking during an earthquake event.

What is meant by “material” in the context of engineering criteria for ILV?

The engineering criteria for ILV require an assessment of:

  1. what level of vulnerability to liquefaction is material from an engineering viewpoint; and
  2. what level of increase in liquefaction vulnerability is material from an engineering viewpoint.

Regarding 1 above, land can be considered materially vulnerable to liquefaction, where:

  • the land is more likely to suffer moderate-to-severe liquefaction related land damage than none-to-minor liquefaction related land damage. This is measured at up to 100 year levels of earthquake shaking; and
  • the vulnerability to liquefaction means that (without a land repair) an enhanced building foundation (over and above a TC2 foundation) is likely to be required when applying the objectives of the MBIE guidance (2015).

Regarding 2 above, land is considered to have materially increased liquefaction vulnerability where:

  • the observed and measured changes are such that it is more likely than not that a change in vulnerability has occurred. This assessment involves consideration of the uncertainty associated with liquefaction analysis; and
  • from an engineering perspective, the measured change in vulnerability indicates that there has been a change in the use and amenities of the land as a building platform and other related purposes. In practice, an increase of more than five to ten percent in the likelihood of moderate-to-severe liquefaction related land damage is considered material.

For more detail on what “material” means check out section 7.3 and 7.4 in the Canterbury Earthquake Sequence: Increased Liquefaction Vulnerability Assessment Methodology (October 2015).

When assessing my property for ILV, did anyone come to my property and do an on-site inspection?

Following each of the four major Canterbury earthquakes, rapid inspections of liquefaction and lateral spreading were carried out on foot in areas with significant damage.

In addition, Land Damage Assessment Team (LDAT) inspection reports were done for approximately 60,000 individual properties in areas affected by liquefaction. These reports contain details of observations and locations of land damage. This material and other sources of information were used in the assessment of ILV.

What information is used in the ILV engineering assessment of my property?

Various sources of information were used in engineering assessments including:

  • ground surface levels derived from LiDAR (aerial surveys);
  • groundwater levels throughout Canterbury. Approximately 1,000 shallow groundwater monitoring wells have been used for this purpose;
  • aerial photographs taken after each of the four main 2010-2011 Canterbury earthquakes;
  • observed land performance relative to the estimated levels of shaking in each of the earthquakes;
  • peak ground acceleration models based on recorded earthquake shaking intensity for each of the four main 2010-2011 Canterbury earthquakes; and
  • soil characteristics data obtained from extensive geotechnical investigations. This includes data from approximately 18,000 Cone Penetrometer Tests (CPTs), 4,000 boreholes, and 6,000 laboratory tests.

There was no drilling site on or near my property. How do you know whether my property has ILV land damage?

The engineering assessment for ILV is based on many different sources of information, one of which is geotechnical investigations on properties such as drilling.

EQC’s engineering advisors considered all publicly available information, including geotechnical investigations, relevant to a property. This includes geotechnical investigations outside the insured area of land where ground conditions in the area investigated are likely to be similar. Other information, such as observed land damage in the earthquakes, the extent of subsidence that occurred and the depth to groundwater in the wider area were also considered. For each property, EQC’s engineering advisors determined whether they had enough information to make an assessment or whether they needed further geotechnical investigations, before making the final assessment.

My property has been assessed as having IFV land damage but not ILV land damage. Given that they are both based on subsidence of the land, why does my property not have ILV land damage?

Increases in liquefaction and flooding vulnerability each result from subsidence of the land. However, whether a particular property that has subsided will have ILV or IFV land damage, or both, will also depend on factors that are not the same for ILV and IFV.

For example, IFV land damage depends on the flow of water across the surrounding land, as well as the location of rivers and drainage channels. In contrast, ILV land damage depends on factors such as the soil composition at the property and depth to groundwater.

It is therefore possible for a property to have subsided and been assessed as having IFV land damage, but not be assessed as having ILV land damage because it is not in an area that is vulnerable to liquefaction in a 1 in 100 year event.

The earthquakes caused cracking damage to my land. If I repair the cracks, could that help reduce the effects of liquefaction on my land in a future earthquake?

Yes. It is important that you repair the cracks to your land. The cracks are a category of land damage which is different to ILV. But if the cracks are not repaired, they will provide a pathway for the ejection of sediment to the ground surface in future earthquakes, and accordingly will contribute to an increase in liquefaction vulnerability.

EQC generally pays an amount for the cracking damage on the basis of repair cost. EQC expects that an amount paid for cracking damage on that basis will be used for the repair of the cracks. This payment will be part of any visible land damage settlement in your settlement pack.

For general guidance on repair methods that can be used for cracking damage that occurred on insured land as a result of the 2010-2011 Canterbury earthquakes, see the Guide to Settlement of Canterbury Flat Land Claims.

Settlement of claims for ILV land damage

How are you settling properties confirmed as having ILV?

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 will assess 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. 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 building) 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.

How do you decide which properties have their settlement based on DOV or which ones on repair cost?

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.

EQC considers several factors in determining whether there is a repair methodology for a particular property. These factors include whether it would be recommended by a prudent engineering advisor, and whether it could practically be carried out on the property.

More detail regarding how EQC settles ILV land damage is set out in the IFV and/or ILV Land Damage Consolidated Policy Statement.

How would an ILV repair cost settlement compare with an ILV DOV settlement?

In summary:

  • What you have to do with the cash settlement amount – If you are settled on the basis of repair cost, EQC will expect that you use your settlement payment to complete a ground repair of the ILV land damage. Your future entitlement to EQC cover may be affected if your settlement payment based on repair cost is not used for this purpose.

On the other hand, if you are settled on the basis of DOV, there is no requirement to use the settlement payment to mitigate the effects of any future liquefaction. Your future EQC cover for the property will not be affected.

  • Settlement amount – For both types of settlement, the amount will depend on the specific characteristics of the property and the ILV land damage. Each property is different and is assessed on a case by case basis, so no customer’s settlement amount is indicative of another’s. Generally, the amount of a DOV settlement will be less than the amount of a repair cost settlement.

For both types of settlement, EQC will deduct an excess. If the total amount of your land claim for a specific event is $5,000 or less, EQC will deduct a minimum excess of $500. If the claim is greater than $5,000, EQC will deduct an excess of 10% up to a maximum of $5,000 per claim.

  • Timing – Almost all ILV land damage claims have been settled in 2016 but there are still some that need to be settled in 2017. Generally a DOV settlement amount will be paid sooner than a repair cost settlement amount. EQC will not pay a repair cost settlement amount until it is satisfied that the ILV land damage repair will actually be carried out.

What about properties where homeowner assigned their land claims to their private insurer under a valid Deed of Assignment? How are they settled?

If a homeowner enters into a valid Deed of Assignment of the land claim to their private insurer, EQC will settle the claim with the private insurer in accordance with that assignment.

Before assigning a land claim to the private insurer, a homeowner should take independent legal advice about the effect of taking such a step.

What happens if I have already had a settlement for land damage or I was told I would not receive a payout for land damage?

This previous settlement may have related to visible land damage, such as bridges, culverts, and retaining walls as well as cracking, silt removal, or undulation. You will receive an additional settlement if your land was confirmed as having ILV land damage.

At the time the previous land settlements were made, EQC was unable to confirm which properties had potentially suffered ILV land damage.

How is EQC settling claims for ILV land damage on red zone properties?

EQC is assessing and settling all residential land claims across Canterbury in a consistent way – whether they are green zone properties or red zone properties.

EQC’s priority is to first settle claims for land damage on green zone properties and red zone properties whose homeowners haven’t accepted the Crown offer.

EQC also continues to work with Land Information New Zealand (LINZ), which has taken over management of the Crown owned red zone properties. EQC expects to agree a settlement approach with LINZ in the first half of 2017, applying the same policies EQC has used to settle green zone land claims. EQC aims to settle Crown owned red zone properties in 2017.

When can I expect to receive my ILV payment?

EQC expects all ILV customers will receive their settlement in 2017.

Do some properties have both IFV and ILV land damage and if so when will they be settled?

EQC began making settlements for customers with both IFV and ILV land damage in September 2016. All of these settlements are expected to be completed in 2017.

DOV settlement method

How is DOV for an ILV property assessed where the house is still in place?

Where the house that was on the land before the 2010-2011 Canterbury earthquakes is still in place, EQC’s valuers will take the following steps to assess the amount of DOV for a property with ILV land damage:

  1. Establish the pre-earthquake value of the property

    EQC has appointed Quotable Value Limited (QV) to assess the market value of the property (both the insured land and the house) as at 3 September 2010, the day before the first of the 2010-2011 Canterbury earthquakes.

    This base valuation is a fair market valuation as at 3 September 2010 and is not distorted by the effects of the 2010-2011 Canterbury earthquakes on the property market.

  2. Determine the amount of the reduction in the property’s market value because it has ILV land damage

    EQC’s valuers assess the long-term market reduction of value, taking into account the characteristics and practical implications of the ILV land damage. For your property, this includes factors such as the increase in the property’s vulnerability to liquefaction-related damage in a 1 in 25 year, and in a 1 in 100 year, earthquake event.

    In assessing the DOV, EQC’s valuers will not take into account any shifts in value resulting from matters other than the ILV land damage (e.g. a change in the building regulations and practices after the 2010-2011 Canterbury earthquakes).

    The percentage of DOV is applied to the pre-earthquake value determined under Step 1. The result is a dollar amount of the reduction in value due to the ILV land damage.

  3. Exercise valuation judgement in a final review

    EQC’s valuers carry out a final review to ensure the reduction in value determined for the property is appropriate as a matter of valuation judgement.

How is DOV for an ILV property assessed where the house has been or will be rebuilt?

Where the house that was on the land before the 2010-2011 Canterbury earthquakes has been or will be rebuilt, EQC's valuers will take the following steps to assess the amount of DOV for insured land with ILV land damage.

  1. Establish the pre-earthquake value of the insured land on the property

    EQC has appointed Northland Valuers Malone Limited to assess the market value of the insured land on the property as at 3 September 2010, the day before the first of the 2010 judgement ILV land damage.

    This base valuation is a fair market valuation as at 3 September 2010 and is not distorted by the effects of the 2010-2011 Canterbury earthquakes on the property market.

  2. Determine the amount of the reduction in the market value of the insured land because it has ILV land damage

    EQC's valuers assess the long-term market reduction of value, taking into account the characteristics and practical implications of the ILV land damage. For the insured land on the property, this includes factors such as the increase in the property's vulnerability to liquefaction-related damage in a one in 25 year, and in a one in 100 year, earthquake event.

    In assessing the DOV, EQC's valuers will not take into account any shifts in value resulting from matters other than the ILV land damage (e.g. a change in the building regulations and practices after the 2010-2011 Canterbury earthquakes).

    The percentage of DOV is applied to the pre-earthquake value determined under Step 1. The result is a dollar amount of the reduction in value due to the ILV land damage.

  3. Exercise valuation judgement in a final review

    EQC's valuers carry out a final review to ensure the reduction in value determined for the insured land on the property is appropriate as a matter of valuation judgement.

What if my ILV land damage settlement was based on DOV, but I think the land can and should be repaired?

In this case you can request a review of your settlement decision.

EQC may change the land settlement amount to be based on repair cost if EQC is satisfied that, in accordance with its ILV Policy:

  • your 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;
  • you intend to undertake the repair within a reasonable period of time using the repair methodology; and
  • the repair cost is not disproportionate to the DOV of the property, determined on a case by case basis.

Where the settlement amount is based on repair cost, the cost is based on the repair of the ILV damage to the area of land sufficient to provide a building platform for the house on the property. Any remaining insured land with ILV land damage will be settled on the basis of DOV, if any.

Why are you settling all properties that have a house on site on the basis of DOV? Isn’t there a recognised repair method for such properties?

The only available ground improvement method, Horizontal Soil Mixed (HSM) Beams that may be feasible:

  • is new and experimental;
  • cannot be applied to most properties; and
  • in any event, presents many practical challenges.

For these reasons, where the house that was on the property before the 2010-2011 Canterbury earthquakes is still in place, EQC is settling on the basis of DOV rather than the repair cost. However, if you wish to repair your land, you can seek a review of EQC’s settlement decision.

Where the property has been sold, ILV will be settled based on DOV. Why?

If no ILV land damage repairs are carried out before the sale, settlement will be on the basis of DOV and not repair cost. This reflects the fact that where the property has been sold, the original claimant will not later carry out the ILV land damage repairs.

Such approach for sold properties follows the December 2014 Declaratory Judgment on the settlement approach used for Increased Flooding Vulnerability (IFV) land damage.

What do I have to do with my ILV land settlement amount assessed on the basis of DOV?

You may wish to use the ILV DOV settlement amount to mitigate the effects of any future liquefaction. But there is no requirement to do so. Your future EQC cover for the property will not be affected.

Repair cost settlement method

Will you be repairing ILV land damage?

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.

Is the repair cost settlement only for a repair of the ILV land damage on my house footprint? What about the repair of ILV land damage on the rest of my land outside the house footprint?

Under a repair cost settlement, EQC will pay the repair cost of ILV land damage to the area sufficient to provide a building platform for the house and an area surrounding the platform (1-2m) as specified for the repair in the MBIE guidance document (“the surrounding area”).

EQC will also pay the amount of the reduction in market value, if any, (referred to as the Diminution of Value (DOV)) of the rest of the insured land area (outside the building platform) as a result of ILV land damage.

It is not always practical or necessary to repair land outside of the building platform and the surrounding area.

What are the benefits of repairing ILV land damage on my property?

The repair of the ILV land damage can return the liquefaction performance of the land back to at least the level it was at before the 2010-2011 Canterbury earthquakes.

Also MBIE guidance ground improvement methods may enable the use of TC2 foundations as an alternative to TC3 surface structure foundations. Use of MBIE guidance ground improvement methods improves the performance of the land, reducing the likely need for re-levelling in a future earthquake.

A geotechnical site specific assessment should be undertaken by an engineer to determine the most appropriate and cost effective ground improvement method for your property.

If I repair my ILV land damage, does that mean my property won’t have any liquefaction in a future earthquake?

The repair of the ILV land damage is intended to return the liquefaction vulnerability of the land back to at least the level it was at before the 2010-2011 Canterbury earthquakes.

When EQC settles an ILV claim based on repair cost, the settlement is for the cost of the land repair to the building platform and an area (1-2 metres) surrounding the platform (as specified for the repair in the MBIE guidance document). The settlement won’t cover the cost to repair the rest of the insured land – although EQC will also pay the amount of the reduction in market value (if any) of the rest of the insured land area.

The repaired land will have a greater ability to withstand liquefaction related damage in a future earthquake than in its unrepaired state. However, the remaining land on the property that is not repaired may still be vulnerable to liquefaction, meaning that depending on the size of the earthquake, liquefaction ejecta, settlement and surface cracking may still occur on the unrepaired land.

What are the available ILV land damage repair methods?

Where it is necessary to remove or rebuild a house because of the extent of the earthquake damage to the house, there are numerous established land repair methods that can be used to repair the ILV land damage. These include but are not limited to:

  • stone columns;
  • timber poles;
  • reinforced soil-cement raft; and
  • reinforced gravel raft.

These methods are set out in section 15.3.10 in Part C, and Appendix C4 of the Ministry of Business, Innovation and Employment (MBIE) guidance document “Repairing and rebuilding houses affected by the Canterbury earthquakes”. The suitability of each particular method will depend on the characteristics of a property. Specific engineering advice should be sought as to which ground improvement methods are appropriate for a property

However, the ground improvement methods that are available where the house is rebuilt or removed are not available where the house remains in place. The only available ground repair method that may be feasible where the house remains in place, Horizontal Soil Mixed (HSM) Beams that may be feasible:

  • is new and experimental;
  • cannot be applied to most properties; and
  • presents many practical challenges.

For these reasons, where the house is still in place after earthquakes, EQC is settling on the basis of DOV rather than on the repair cost. However, if you wish to repair your land, you can seek a review of EQC’s settlement decision.

More information on the ground improvement methods can also be found on EQC website here.

What do you mean by the customer intending to undertake the repair of their land in a reasonable period of time, when determining whether settlement of their claim for ILV should be based on repair cost?

EQC will only settle based on repair cost if the repair will actually be carried out. As part of that condition, the repair needs to be done in a reasonable period of time. Otherwise settlement will be based on DOV.

What is “reasonable” will be determined by EQC on a case-by-case-basis and will depend on the particular circumstances of the customer and their property. EQC is looking to complete all ILV settlements in 2016.

What do you mean by a rebuild on a property in this context?

A rebuild normally involves taking the house off the site (by demolition or relocation) and building a new house in its place. The result is that for a period of time the site will be cleared. Therefore, before the new house is built, land damage repairs can be carried out on the area of land which is the building platform for the new house.

Will all properties that are ‘rebuilds’ get their ILV settlement based on repair cost?

Not necessarily. Some rebuilds may not include a ground repair that will address ILV land damage and therefore the settlement will generally be based on DOV.

How does EQC identify that there is a ground improvement method available for the ILV land damage on my property?

If EQC has contacted you regarding a possible repair cost settlement, then EQC’s engineers, Tonkin + Taylor, will have already carried out a preliminary desktop assessment on your property. This is to determine if there may be an available ground improvement method to address the ILV land damage on your property.

It will then be up to you to appoint your own professional advisor (for example, an architect, engineer or licensed building practitioner) as a first step in identifying a suitable ground improvement method for ILV land damage on your property.

Where can I find a professional advisor to help me identify a suitable repair method for the ILV land damage on my property?

Registers of qualified architects, engineers and licensed building practitioners can be found at:

You said that I need to engage a professional advisor (for example, an architect, engineer or licensed building practitioner) to help me with the rebuild or repair of my house. Does this include appointing a home building company?

Generally, yes. Most home building companies will employ or contract individuals with the skills EQC expects of a professional advisor. EQC will work with these persons as a first step in identifying a suitable ground improvement method for ILV land damage on your property.

Who pays the costs of the engineer involved in the design of the ILV land damage repair?

EQC will meet the reasonable costs of the ground improvement design own professional advisor to arrange a design, or it is prepared by EQC's engineers, Tonkin + Taylor.

Review

I disagree with my ILV settlement decision (amount and/or settlement method) – how can I get it reviewed?

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

What is the length of time EQC customers have to challenge a settlement for a claim made under the EQC Act?

See here for more information on limitation legislation.

IFV and/or ILV Consolidated Policy

What is the IVF and/or ILV Consolidated Policy?

The Policy includes the way that EQC approaches the assessment of ILV and how EQC will settle claims for ILV land damage. You can find a copy of the Policy here.

What is the ILV engineering assessment methodology?

The Canterbury Earthquake Sequence: Increased Liquefaction Vulnerability Assessment Methodology describes the approach used by EQC’s expert engineering advisors to assess whether residential properties in Canterbury satisfy the engineering criteria for recognising ILV land damage. The general objectives of the Assessment Methodology are to:

  • provide a basis for settlement of ILV land damage claims consistent with EQC’s obligations under the EQC Act, in accordance with the best available scientific understanding of ILV and the information available to EQC; and
  • provide a consistent treatment of the issues associated with ILV land damage, given the large number of properties affected.

The Assessment Methodology sets out the objectives of the methodology and the assumptions made, the information used, and the processes applied in assessing the engineering criteria.

Who developed the engineering assessment methodology?

The Assessment Methodology was developed by EQC’s expert engineering advisors, Tonkin + Taylor over four years. Substantial amounts of new information, which have become available during this time, have been taken into account.

The Assessment Methodology was peer reviewed by an independent expert review panel, comprising world-leading liquefaction researchers from University of Canterbury, University of California, Berkley; University of California, Davis; and Cornell University. The Expert Panel concluded that the “information and assumptions used in the ILV assessment are technically sound, reasonable, and consistent with the objectives set for the assessment” and that it “uses well-founded and current engineering procedures with the best available data and information“. You can find a copy of the Expert Panel peer review report here.

What is the Increased Liquefaction Vulnerability DOV Assessment Methodology?

This is the methodology developed by EQC’s valuers for determining DOV due to ILV land damage. This document can be found here. The methodology has been peer reviewed and approved by a panel of valuers, who were nominated by the major New Zealand professional valuation associations.

What is the Practical Implications of Increased Liquefaction Vulnerability Report?

The Practical Implications of Increased Liquefaction Vulnerability report has been prepared by EQC’s engineers, Tonkin + Taylor, to assist EQC and its valuers in developing and implementing an ILV DOV methodology. The report presents the advice that a geotechnical engineer would be expected to give a buyer or seller of a property in Canterbury about the practical implications that result from that property having a material increase in liquefaction vulnerability due to the 2010-2011 Canterbury earthquake sequence. These practical implications include:

  • an increased likelihood of moderate-to-severe liquefaction related land damage in future earthquakes;
  • an increased likelihood of significant liquefaction related building damage for existing residential buildings in future earthquakes; and
  • potential increased ground improvement and building foundation requirements for new residential buildings.

ILV land damage on properties where the house has been or will be rebuilt

What does "has been or will be rebuilt" mean

For ILV land damage assessment purposes, EQC considers that the house on a property "has been or will be rebuilt" where either:

  • the insured land on the property is currently a vacant site; or
  • the house that was on the property before the 2010-2011 Canterbury earthquakes:
    • currently remains on the property but is intended to be rebuilt on the property; or
    • is currently being rebuilt on the property; or
    • has already been rebuilt on the property

How do you determine that a customer intends to rebuild their house on the property?

EQC determines the customer's intent by taking into account relevant information, such as for example, statements made by the customer and/or their private insurer, and consent information obtained from the local authority.

How would the DOV assessment as a result of ILV land damage be different if the house that was on the property before the 2010-2011 earthquakes remains in place and is not to be rebuilt?

In that case, the DOV assessment would be based on a different valuation methodology, which is used where the house that was on the property before the 2010-2011 earthquakes remains in place and is not to be rebuilt. The DOV would apply to the insured land and the associated residential buildings, such as the house, garage and garden shed. See Diminution of Value Methodology for Increased Liquefaction Vulnerability (for properties with residential building in place), June 2016.

By contrast, where the house has been or will be rebuilt, EQC’s valuers use a valuation methodology developed for that situation. The DOV reflects the loss of value of the insured land only. The assessment of the DOV takes into account the impact of ILV land damage on the future use of the insured land, including as a building platform for a house. See Diminution of Value Methodology for Increased Liquefaction Vulnerability (for where the residential building has been or will be rebuilt), November 2016.

Why is DOV assessed differently for ILV properties where the house that was on the property before the 2010-2011 earthquakes has been or will be rebuilt (as compared to where the house remains in place and is not to be rebuilt)?

For properties where the house remains in place and is not to be rebuilt, the customer has a damaged asset (insured land) that is associated with a house that will stay on the land. The reduction in market value (DOV) will apply to the insured land as well as the house as a result of the ILV land damage.

However, where the house has been or will be rebuilt, the pre-earthquake house no longer is, or will be, associated with the insured land. In this case, DOV cannot be assessed by reference to the pre-earthquake house as it will be replaced by a house that may have different characteristics and value. The potential characteristics and value of a new house will be reflected in the value of the insured land. The DOV will therefore be assessed for the insured land value only. This DOV assessment will take into account the likely impact of the ILV land damage once a new house is rebuilt.

General

Will liquefaction information go on my LIM?

EQC does not decide what information goes on the LIM. This is a question for local authorities.

You can find out more information on how the Christchurch City Council places information on LIMs here.

If a property is sold, how will a buyer know if the property has ILV or IFV land damage?

When purchasing a property, the buyer should always seek legal advice. A prospective buyer should ask the seller whether EQC has provided any information and/or made settlement payments regarding ILV and/or IFV land damage on the property.

Does the Declaratory Judgment affect ILV properties?

While the main questions addressed by the Declaratory Judgment in the High Court relate to Increased Flooding Vulnerability, the Judgment also confirmed that ILV is a form of land damage, Diminution of Value (DOV) can be used as a settlement method, and EQC is entitled to have a policy to settle ILV damage.

Is a property with ILV land damage insurable?

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 ILV land damage.

Page last updated: 3 Mar 2017

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