Canterbury earthquake building claims

Why you would reopen your claim

There are several reasons why you might request a review of your building claim.  
You might be concerned that: 

• the settlement did not include all earthquake damage 
• the repair work or repair strategy hasn’t, or won’t, repair the earthquake damage to the standard required by the EQC Act
• the cash settlement wasn’t, or isn’t, sufficient to meet the reasonable costs of undertaking the repair strategy.  

Get your building claim reviewed

There is some specific information that we’ll need to carry out your building claim review. 

Getting your property damage assessed

As the homeowner, it is your responsibility to provide evidence that supports missed damage or substandard repairs at your home.  
 
To do this, you may need one or more experts to carry out an assessment and provide a report to your claim manager to determine the cause, extent and appropriate repair strategy for earthquake damage.  
 
Your claim manager will advise what expert reports are required to progress your claim. If expert reports are helpful and relevant, NHC will generally meet the fair and reasonable costs of preparing them. If the reports do not provide the information we need, NHC will not meet the report costs.   

Information we need to receive

For NHC to accept an expert report, the report should address the following:

• Whether or not individual parts of your home were damaged because of the Canterbury earthquakes. This must include a satisfactory explanation of the reason for, or cause of, that damage.  
• If certain damage is historic and not earthquake-related, the expert should say so and explain their conclusion.  
• Where the expert decides that any previous NHC earthquake repairs have failed, they must explain why the failure has occurred. Statements like "the repair was not completed properly" without further explanation will not be sufficient.  
• Expert reports should note any uncertainty in assessing how the damage occurred.
• If a property has historic floor level variation (dislevelment), the engineer needs to be satisfied that the earthquakes altered the floor levels enough to have an impact on the usefulness or aesthetics and, if possible, by how much.  
• The impact of any post earthquake renovations or other work done to the property on the assessment of any unrepaired earthquake damage to the property.  
• If there are limitations preventing the expert from considering some of the above factors, the expert should explain why they can't reasonably consider them.  
• Your claim manager will advise which expert(s) should also provide detailed repair costs in their report to help NHC understand the likely costs.

This information is summarised in our obtaining expert reports for a Canterbury claim factsheet [PDF, 770 KB].  

The settlement process for reopened claims

Once your property has been assessed, we’ll review the information you provide to determine what can be covered under the EQC Act. As part of this process, we will likely visit your home to verify the damage outlined in the information you’ve provided.

If we accept that your property has earthquake damage and the proposed repair costs are fair and reasonable, we’ll confirm this in writing to you.

If your natural disaster damage does not involve any structural repairs, we’ll advise you in writing to proceed with your repair. Once we receive evidence of completed repairs, along with any invoices or producer statements from your contractors, we’ll pay you (or your mortgagee) within seven working days.

If you discover further damage after the work has begun, please contact the person managing your claim. If the additional damage was caused by an earthquake or needs to be reinstated as part of the earthquake repairs in accordance with the EQC Act, we’ll confirm the extent of additional costs we may cover in writing.

An excess applies to EQCover (now NHCover) residential building claims and is calculated at 1% of the maximum amount payable, including GST. The person managing your claim will be able to provide more detail about your excess requirements.

If the damage is from more than one event

The multiple large-scale earthquakes and aftershocks in Christchurch are unique in world insurance history.  

Because of the complexity of the Canterbury earthquake sequence, a 2011 High Court ruling was necessary to decide how to handle multiple insurance claims. The ruling declared that natural hazards cover renews after each event as long as the property remains insured.  

If your home suffered damage in more than one earthquake event, we need to determine how much damage was caused by each individual quake, and whether subsequent quakes changed the required repair strategy. This process is called apportionment. 

Because cover begins again after each event, we must determine when the damage occurred so we can work out which costs may be covered under the EQC Act. 

There is a limit to EQCover for each event

During the period of the Canterbury earthquakes, EQC Toka Tū Ake (now the Natural Hazards Commission Toka Tū Ake (NHC)) covered earthquake-related damages up to $100,000 plus GST per claim.  

The EQCover cap that applies to your property is shown in the insurance policy or schedule that applied at the time of the earthquakes. If your damage has been assessed as close to the cap, we will talk to the insurer who held the policy at the time of the earthquake to determine whether there is any private insurer liability and who the claim will be handled by.  

If apportionment shows that no damage from any single event exceeds the EQCover cap, the settlement to the building will be managed by us. However, if damage from a single event is over the EQCover cap, then we will discuss your settlement options with you and  the private insurer. If you bought the home after the Canterbury earthquakes, a private insurer settlement may not be available if the damage is over the EQCover cap.

In many cases, a house may have damage over the cap amount, but settlement will still be managed by us because the damage is spread across more than one event. For example, a house with damage of $160,000 spread across two events could have two claims for $80,000 each, meaning the claim will remain with NHC rather than be handed over to your private insurer. 

How damage from each event is determined

If your property was assessed after each event, apportionment is straightforward as we’ll have records of the damage that occurred with each quake. But, if there was no time to collect this information before the next quake happened, we use a variety of industry-accepted methods to establish how damage should be apportioned.

Alongside the information you provide, this may involve comparing the damage with similar properties in the area where we know what damage occurred and when it occurred. The methods we use have been in place since the apportionment process was developed in 2011.

Apportionment ensures NHC and private insurers can show reinsurers how and when the damage was caused and show that NHC is only paying for the damage caused by the event claimed for.  

The apportionment process must be robust to maintain the credibility of NHC and the New Zealand insurance industry with international reinsurers.