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Thursday, May 31, 2012

EQC fiddling with it’s FAQs again.

In the last day or two EQC have removed part of it’s FAQ on TC3 land (here). As with previous occasions there is no note indicating a change has been made, what the change was, and why it was made.

The text that has been removed is below. The second section, about insurance companies honouring a policy if land is considered uneconomic to repair, seems crucial information.

Some land claims issues

The ‘Financial Agony Aunt’ also threw up some issues to do with the settlement of land claims. The Technical Categories do not affect your land claim, they are part of your building claim with EQC and your insurer. But land claims are an important issue and worth discussing all the same.

Will insurers still honour a policy and repair a house if the land underneath is considered uneconomic to repair?

If your land is considered to be uneconomic to repair by EQC, it does not necessarily mean the land cannot be built on.

For example, if EQC decided to pay out for the maximum entitlement under the Earthquake Commission Act, you and your insurer would need to discuss next steps, based on your individual policy and specific circumstances.  Of course the maximum entitlement will not be paid in all cases – it will depend on the area of insured land that is damaged.

Your insurer may require you to provide for any shortfall in the cost of remediation before agreeing to repair or rebuild your home.

The maximum entitlement depends on a number of factors including the minimum allowable lot size for properties in your area, as stated in the council’s District Plan. This minimum lot size varies across the region. It is not 450m2 in all areas. 

What does EQC cover as part of a land claim?

If your house is insured, EQC also insures a defined area of your residential land. EQC will assess the amount of damage to your residential land and provide cover up to the maximum amount specified in the Earthquake Commission Act.

Residential land is land on which the house is situated, and land within 8 metres of the house.

Is EQC planning to stop covering land?

No. Our Briefing to the Incoming Minister, from December 2011, discussed changes to the way EQC covers land but crucially for Canterbury customers:

There is no suggestion land cover will stop

EQC itself doesn’t make these decisions, Parliament does by changing the Earthquake Commission Act

Changes will not be retrospective, so all current claims will be covered by the current cover.

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