Land claims are now being settled in Canterbury.

Transcription

1 Land claims are now being settled in Canterbury. HERE S A SUMMARY OF THE PROCESS

2 Any damage to the house s foundations is covered by the building claim (not the land claim) Trees and gardens are not covered Retaining walls that are necessary for the support or protection of the house or the access way are covered. Bridges and culverts that are within 8 metres of your house (or up to 60 metres if they form part of the main access way) are also covered Landscaping (non-structural walls) is not covered Water, drainage, sewerage, gas and underground electricity and telephone lines owned by the homeowner are covered by the building claim, not the land claim Land within 60 metres of the house which forms the main access way is covered. Any artificial surface like asphalt or concrete is not covered WHAT LAND IS COVERED? The type of residential land cover provided by EQC is not offered anywhere else in the world. All holders of residential building insurance are eligible for EQC s land cover. Your land claim is separate to your contents and building claims. What land is and isn t covered is defined by the Earthquake Commission Act, and by law EQC insures only certain portions of a section. Cover for bridges, culverts and retaining walls is for their indemnity value, which is usually less than their replacement value. Indemnity value means the current value of an item, taking into account its age and condition when it was damaged. The insured land is land on which the home sits, and land within 8 metres of the home or outbuildings - such as a garage or shed. Land within 60 metres of the home that is part of or supports the main access way to the home from the boundary is also covered. The surface of the driveway or any artificial surfaces like concrete or asphalt that cover the access way are not covered but may be covered by your private insurance policy. EQC cover for land damage also includes: bridges and culverts that are within 8 metres of the home, or on land within 60 metres of the home that is part of or supports the main access way; and retaining walls and their support systems that are necessary for the support or protection of the home or insured land (including the main access way) if they are within 60 metres of the home. It s important to note that things that are on the land, such as trees, plants or lawn, are not covered by EQC. Retaining walls that serve a landscaping function, rather than supporting or protecting your house or the insured land (including the main access way), are generally not covered by EQC. Other items, including fences, walls, drains and channels, are not covered as land damage but may be covered as residential building damage if they are an integral part of the building that is your home. For a full list of what is covered and not covered under a land damage claim, see the definition of residential land, and Schedule 2, in the Earthquake Commission Act 1993 at

3 STEPS IN THE LAND CLAIM SETTLEMENT PROCESS CLAIM LODGED LAND AREA ESTABLISHED Establish the defined area of the residential land that is insured (the insured land ) 3. DAMAGE ASSESSMENT Assess the type and extent of damage to the insured land 4. COST ASSESSMENT Assess the cost to repair the land damage caused by the earthquake 5. SETTLEMENT DECISION 6. Calculate the cash settlement amount SETTLEMENT Pay any settlement amount to the homeowner or mortgagee There are six steps in the land claims process. EQC calculates the land claim settlement based on: Step 1 the cost to repair land that is physically damaged or lost in the earthquake (or in some circumstances the reduction in the value of the damaged land, where repair is not possible or unlikely to occur for practical reasons), plus the indemnity value of any bridges, culverts, and retaining walls and their support systems that are covered. Claim lodged When EQC receives a claim we check that the property is covered by a private insurance policy and that the claim has been lodged within 90 days of the damage-causing event. If a customer has a building or contents claim for the event, EQC can add a land damage claim outside the time limit. Step 2 Establishing the defined area of the residential land that is insured The settlement amount is the lesser of the cost of repair and the valuation figure (e.g. value of the area of damaged land). EQC checks whether the land damage has happened on the insured portion of land through an initial on-site assessment. Almost all of these rapid assessments have been completed. If the total cost of the repair exceeds the maximum amount payable under the EQC Act, EQC s liability is limited to that maximum amount. This maximum amount for land is often (but not always) the value of a parcel of land that is the minimum lot size under the relevant District Plan. This land value is calculated by experienced valuers familiar with the local market. Step 3 Assessing the type and extent of land damage EQC contacts the owners to agree a suitable time to access the property for a detailed damage assessment. Property owners do not need to be present while the assessment is carried out, but most people choose to be. The assessment takes around minutes during which time the assessors make detailed notes on a land sketch. This sketch forms part of the settlement pack sent to the land owner. In some cases the physical assessment of damage is supplemented by desk research studying data such as LiDAR maps showing changes in elevation after the quakes. Step 4 Assessing the cost of the repair EQC s costings are based on the methods of repair developed by EQC for each type of land damage. For example, the settlement amount to repair cracks greater than 5mm is based on the cost of filling the cracks with cement or bentonite. Information about the repair methods will be sent out in the settlement pack. This information is also available online at The potential repair methods are for costing purposes only. In most cases EQC will not repair the insured land. Step 5 Calculating the cash settlement amount Land damage settlement decisions are made under section 19 of the EQC Act and EQC will always pay the full entitlement under the Act. An excess is then deducted for each land claim. If the claim is $5,000 or less, EQC will deduct an 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. The value of a cash settlement therefore will usually not be the amount of money needed to repair the insured land, or retaining walls, bridges or culverts. Here s an example that demonstrates how it works Jim and Mary Flatt own a flat land property with moderate damage to the land. There is an area of 30 square metres of land that has cracks running through it that are greater than 5mm wide. Of that, 12 square metres is insured land. Value of lost or damaged land $3,600 (12 sqm at $300 per square metre) Cost to repair cracks $2,400 EQC settlement $2,400 Less Excess ($500) Final pay out $1,900 (the lesser of the two) ($500 is the minimum excess for a land claim) Step 6 Paying the cash settlement EQC will pay any cash settlement amount to the homeowner unless there is a mortgage on the property and the amount exceeds the mortgagee threshold, in which case the payment goes to the mortgagee. Customers will receive a settlement pack which will include the settlement amount and additional information showing how this amount was calculated. If you believe that EQC has incorrectly calculated your settlement you can call 0800 DAMAGE ( ) to appeal the decision. In order to be successful in your appeal you need to demonstrate an error in EQC s calculations, such as incorrect measurements or damage that has not been included in the assessment. Please note that due to the limitations of EQCover, the settlement in many cases won t meet the cost of repair. This is not grounds for appeal. ASSESSMENT PROGRESS Assessments to determine the cost to repair flat land damage began in March 2013 and are expected to continue for the whole year. Teams of assessors are working from east to west. In total there are 77,000 properties with land claims to settle. Customers are contacted by EQC to arrange a convenient time for the assessment to take place. Customers can choose whether or not they wish to be present for the site visit. Assessors work in teams of two and wear EQC photo ID. The assessors document the observable land and verify that it was caused by an earthquake. They take detailed notes and measurements which they mark on an aerial sketch of your land. This sketch forms part of the customer settlement pack. The amount of time this assessment takes depends on the extent of land damage, but it is usually around minutes. The assessors are looking for a range of observable land damage including: Land cracking caused by lateral spreading Land cracking caused by oscillation movements Undulating land Local ponding Local settlement causing drainage issues Groundwater springs Inundation by ejected sand and silt Once the site visit is completed the assessors send their notes to the claims centre where the information is checked and loaded into the EQC claims database ready for the settlement amount to be calculated. Given the volumes of information being provided by assessors each day it can take several weeks before all the information is loaded into the claims system. Two types of land damage that are not assessed by a site visit are increased risk of liquefaction and increased risk of flooding in future events. These types of land damage are covered by EQC, but they require analysis of a range of data including: soil samples collected through drilling, topographical information from land elevation maps, information about the depth to ground water, and flood maps. These are complex claims and will take longer than others to settle. However they will be settled by the end of 2014.

4 THE LAND SETTLEMENT PACK REPAIRS EQC sends out a settlement pack once the settlement amount has been calculated. The settlement pack includes a letter explaining what the amount covers, how it was calculated and guides, which set out potential methods of repair used for costing purposes. Owners are responsible for repairing their own land, as EQC cash settles rather than remediates land. The pack also includes a copy of the land sketch drawn by the assessor and an accompanying legend which explains the drawing. A settlement calculation sheet is enclosed showing how the amount was worked out. An example of a settlement pack is available on the EQC website at GE ( DAMA NT TLEMLEAT F TO SET GUIDAENTERBURY OF C CLAIMS LAND ) Land Settlement Calculation 22 April 2013 CLM/2010/ CHRISTCHURCH 5 SAMPLE STREET, SUBURB, JOE BLOGGS Claim Number: Damage Address: Claimant: Land Settlement Amount*: Excess deduction**: $2, ** To be deducted from Land *Incl GST (if any) $ Settlement Amount Act 19 of the Earthquake Commission MR Joe BloggsLand Settlement Amount Breakdown Full details are set out in section of the area of damaged land). Street the valuation figure (e.g. value lesser of the cost of repair and 5 Sample ^ The settlement amount is the Settlement Decision^ Suburb Valuation 8000 $32, Christchurch Damage Element $1, Land Damage Silt Removal $1, N/A Dear Joe Bloggs ge at 5 to land dama s relating ing claim/ the follow ement claim settl (EQC) has a record of ission W, : uake Comm church 30km The Earthq, Suburb, Christchurch d by Christ 2010 cause Sample Street date 6/09/ SE, on report church 10km 010/ d by Christ No. CLM/2 /2011 cause ) Claim 25/02 /2010 date (04/09 on report 10km, / No. CLM/2 Claim ) /2011 m 5km, 6.3 (22/02 land and confir ion of your condit ed the have assess Decision Settlement has been accepted. We CLM/2011/ ge. claim Your landclaim Number:uake-related dama5 SAMPLE STREET, SUBURB, CHRISTCHURCH Address: d under the Damage of earthq JOE BLOGGS evidenceclaimant: land insure ge for the nt. er dama $ Excesss deduction**: by cash payme natural disast claim/ $1, nt of your Land Settlement Amount*: your **To be deducted from Land Settlement Amount Payment the amou is settling any) *Incl GST (ifated EQC Balance EQC has calcul ission Act Excess Settlement Decision^ CommBreakdown Settlement Valuation Earthquake nt deducted Amou$31, Damage Element $ N/A Land Damage $3, $ Item 0.00)* Silt Removal ($1,00 $4, $3, (if any) ent incl GST ment Total paym t Land settle the amoun Your land of EQC, or 10% dwellini gs have with r of damage you by the numbe 3 claim for land excess is multiplied The $500 on each April 201 per claim. excess of a minimum maximum of $5,000 deducted, to a enclosed with *We have ver is greater ation Sheet payable, whicheland. ment Calcul the in the Settle situated on is provided A breakdown this letter. nt amount of your payme Where there is a mortgage on the property and the settlement amount exceeds the mortgagee threshold then the payment along with a copy of the settlement pack is sent to the mortgagee. The customer receives a copy of the settlement pack at the same time as the mortgagee. If a customer disagrees with the settlement decision or has new information that they believe will support the claim, they can call 0800 DAMAGE ( ) and ask EQC to reconsider. Once a settlement payment has been made, land owners are responsible for repairing their land and should seek appropriate advice before starting repairs. Because an excess is deducted, the settlement amount will be less than what it actually costs the property owner to repair the land damage. EQC recommends customers talk with their mortgagee and or insurer about how the repair money should be spent. By law EQC is limited in the cover it provides for land which means often landowners may need to cover some of the repair costs themselves. In some circumstances you need to make the repairs to your land in order to receive EQCover in future. However, in some cases it will not be possible to repair land, for example if the land has fallen away down a cliff. Some kinds of repairs will need a resource consent. Environment Canterbury and local councils are working together to develop a streamlined resource consent process. Property owners should contact their local council to find out more about the resource consent process and to understand what may, or may not be, required for the land repair. If you are unclear about whether or not your repairs can be carried out, or how to get started please contact EQC on 0800 DAMAGE ( ). TIMEFRAMES Land claims on flat land EQC started settling flat residential land claims in early May, but expects it will take until the end of 2014 to settle all 70,000 properties with land claims. Like assessments, settlement will generally move from east to west. However, some claims are complex so will be settled after others in the area. People with these more difficult claims will receive a letter from EQC explaining the situation. By the start of June around 40,000 properties had been assessed. Around 70 per cent of customers have chosen to be present while the assessment is carried out. All flat land claims will be assessed by the end of this year. So far assessors have found that around 40 per cent of land damage comes under EQC s minimum excess of $500. These customers will receive a letter explaining their land damage is below the minimum excess and no payment will be made. Land claims on the Port Hills EQC has received land claims for 7,000 residential land claims on the Port Hills. All these claims have been assessed through site visits. Payments are underway and it is expected that all Port Hills land claims will be settled by the end of COMPLEX CLAIMS Some claims are considered by EQC to be complex and will take longer to settle than simple claims in the same area. EQC will write to all customers with a complex land claim to explain why their situation is considered complex. Complex land claims fall into the following broad categories: Increased vulnerability to liquefaction Increased vulnerability to flooding Shared land claims (for example, multiple dwellings on a single title) Land with damage to structures such as retaining walls, bridges and culverts Some green zone properties may have an increased risk of liquefaction in a future 1-in-100 year quake. EQC is using data from soil samples, as well as information showing changes in land height and groundwater tables to confirm which properties have this type of damage. This analysis of the damage, as well as testing of proposed repair methods, will take time. Some green zone properties may have an increased risk of flooding in a future 1-in100 year rainfall or high tide event. EQC is analysing data showing changes in land elevation and flood maps to confirm which properties have this type of land damage. Properties with multiple dwellings such as a block of flats are considered complex land claims because of the difficulty in establishing who owns the damaged land. About 14,000 claims have shared ownership which EQC needs to consider before it can calculate the settlement amounts. Land which has damaged retaining walls, bridges or culverts on insured land are considered complex because of the time it takes for valuers to calculate and cross check the indemnity value of the damaged structures. Indemnity value is the current value, taking into account the structure s age and condition when it was damaged. Regardless of the complexity, all land damage assessments on the flat will be completed by the end of 2013 and all claims settled by the end of For more information go to or phone 0800 DAMAGE ( ).

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