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EQC begins settling ILV land damage claims

[Head of Canterbury Land Settlement for EQC, Keith Land]

The Earthquake Commission has begun settling claims for Increased Liquefaction Vulnerability (ILV) land damage.

Keith Land, Head of Canterbury Land Settlement, says that the settlements will go to 4,400 customers whose properties have qualified as having an increased vulnerability to liquefaction following the 2010-2011 Canterbury earthquakes.

“Each qualified property is being assessed and will be cash settled on a case-by-case basis as we have done to date with other forms of land damage resulting from these earthquakes. Similar to Increased Flooding Vulnerability (IFV) land damage, settlement of ILV land damage is a world-first. This type of land damage has not been covered by insurance anywhere else, so considerable work was required to get the engineering and valuation methodologies right." said Mr Land.

“We want to make sure that the final settlements are based on a robust and appropriate settlement process so that customers can have confidence their claims for ILV land damage have been paid consistently and fairly.”

EQC expects at least two thirds of ILV customers will receive settlements based on the reduction in their property’s market value caused by ILV, also known as Diminution of Value (DOV).
“This is because generally, there are no available ground improvement methods to address ILV damage on a property where a house has remained in place since the earthquakes,” says Mr Land.
The remaining third of ILV customers are being assessed for a settlement based on the cost to repair the ILV land damage. This will generally be in situations where the house has already been, or will be, rebuilt or removed due to the earthquake damage.”

Customers receiving a ‘cost to repair’ settlement will be individually case-managed, as the situation for each of them varies. Before it can be confirmed that these customers will receive a repair cost settlement, more information is needed to understand their property’s current situation.

Mr Land says that settlements for DOV customers began this month and EQC also started contacting repair cost customers.

EQC has resolved nearly 90% of properties with land claims resulting from 2010-2011 Canterbury earthquakes, and expects to resolve the remainder of the land programme by the end of 2016.
EQC will also hold six ILV meetings from July to November for customers whose settlements are based on DOV. The purpose of the meetings is for customers to ask questions and hear from EQC and its valuers about what’s been involved in ILV settlement decisions.

For more information on these meetings and ILV land damage, including Q+As and engineering and valuation methodologies, please click here

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