Cook Strait Earthquakes FAQ
1. How do I know whether I am covered
under the EQC Act?
You’re covered by EQC for your home
and land if you have a current private
insurance policy for your home that
includes fire insurance - and it must
include fire insurance. You also have EQC
cover for your contents if you have a
current private insurance policy for your
contents that includes fire insurance.
Cover provided has certain dollar limits,
as set out in the EQC Act.
2. What sort of coverage can
I expect from EQC?
EQC covers residential buildings, certain
contents and some of your land against
natural disaster damage, as set out in
detail in the Earthquake Commission Act
1993. The amount and basis of cover is
limited to that set out in the EQC Act.
3. What happens if after I make a claim,
I suffer more damage from another
earthquake?
You should lodge a new claim for any
new damage suffered in another event.
4. What happens after I make a claim?
After you have lodged a claim, a claim
manager is allocated to your claim, a
hardcopy file is prepared and the claim
file sent to the local field office for
coordination and release of the claim for
assessment. The assessor phones you
to make an appointment with you to
view the damage. They will tell you what
damage is earthquake related, what is
not covered, and why. The assessor’s
recommendation on your claim is
checked and the information is put into
the claim system. From here the claim
manager reviews the claim, checks that
your insurance was valid at the time of
the event and either settles and pays
the claim or declines it. You will receive a
letter and supporting information from
the claim manager.
5. What’s the difference between
historical and pre-existing damage and
earthquake damage?
As set out in the Earthquake
Commission Act, EQC will cover any
physical loss of damage to a home that
is the direct result of a natural disaster.
Accordingly, any loss or damage that
isn’t directly caused by an earthquake
isn’t covered. In a practical example,
if your roof is rusty but only part of it
sustained earthquake damage, EQC will
only repair and replace the area of the
roof damaged by earthquake with new
roofing, not the entire roof, assuming
that is a lawful repair.
0800 DAMAGE (0800 326 243)
or visit us at www.eqc.govt.nz
6. Do I have to live within a certain
distance of an earthquake epicentre
to have a valid claim for earthquake
damage?
From EQC’s past experience of
earthquakes - taking into account GNS
advice on how earthquakes usually
behave – the most significant damage
will usually occur near an earthquake
epicentre. This is because the strength
of shaking caused by an earthquake
drops off quickly with distance. This
logic is reflected in the Cook Strait
earthquakes where the most significant
damage occurred in the areas closest
to the epicentre, just off Seddon in
the South Island. Those home owners
located further away from the epicentre
experienced less damage.
7. EQC says it is managing the Cook
Strait Earthquake claims process
differently from the way it did
Christchurch Earthquake Claims. What
are these differences, and why are they
necessary?
We learnt a lot from Christchurch –
what worked and what didn’t.
i. With Cook Strait we are running
assessments as a single event visit,
where we assess all damage, whether
it be to contents, home or land, all
in one go. In Christchurch we did
numerous visits for each part of a
claim. This new approach will help us
settle claims quickly, our objective
being to get all assessments done
in six months. We are confident we
can achieve this, given the more
manageable number of claims just over 9000.
10. How do you prioritise claims for
settlement
ii. We are cash settling all claims and
are not managing any repairs. This
is because of the limited number of
claims and damage. Christchurch
was different because of the massive
scale of the disaster, which required
coordination of repairs to manage
existing resources and skills capacity.
11. What does cash settlement
mean for my claim?
8. I have noticed EQC assessors come up
my road to inspect
repairs at my neighbours and drive off
again, why do they not do all the houses
along our road at the same time? Isn’t it
a waste of resources doing it this way?
In an ideal world we would be able to
do that, but claims are received as and
when customers find time to lodge
them. EQC consolidates the claims
into files for assessors to investigate in
certain geographic areas. This works
well in urban areas, but wide-spread
distances in rural areas are more
challenging.
Some people would complain if
EQC used the approach of delaying
assessment of early claims in order to
await later claims, to save making extra
visits to a particular area. There is no
easy answer.
9. Do I pay excess?
For each claim involving your home
or home and contents, we deduct an
excess of $200 on the claim where it is
$20,000 or less. If your claim is for more
than $20,000, the excess is one per cent
of the total amount payable. For claims
on contents only, the excess is $200,
whatever the amount of your claim. The
excess for land claims is 10% of the claim
settlement with a minimum of $500
per claim and a maximum of $5000 per
claim. Different excess rules may apply
where residential buildings contain
many flats/apartments.
We try to deal first with claims involving
vulnerable persons/families, then the
worst damaged, followed by all other
claims.
EQC will pay cash (cheque or direct
credit) instead of arranging for any
repairs. With this cash you may manage
your own repairs or replace your
damaged contents.
12. Does EQC make claim
payments to the bank rather
than to the claimants?
If there is a mortgage over your
property, above certain thresholds set by
individual banks, we may be required to
make payments for land and/or building
damage to the bank/lending institution.
If, however, your property is freehold,
you receive this payment. For contents
damage, you receive payment directly.
13. If I don’t know anything about
building repairs and are too elderly or
not well enough to deal with organising
my own building repairs, can I seek help
from EQC?
This is not our role but we can put you in
touch with other Government agencies
and local authorities who may help.
14. How does EQC value its assessments
for payment on claims?
EQC costs out a claim like a qualified
tradesperson or builder would cost a
repair job they’re about to undertake.
We consider such things as the likely
costs of materials, consents (if needed),
engineering fees, trade hours, and travel
costs of the tradesperson to complete
the repairs, as outlined in a claim. In this
way, EQC allows for regional differences.
0800 DAMAGE (0800 326 243)
or visit us at www.eqc.govt.nz
15. Can I provide my own
engineer’s report or quotes to support
my claim?
Customers can provide any independent
evidence (engineer’s reports, quotes,
invoices, photographs) to prove damage
is earthquake related, at their own cost,
to support their claims.
16. What if, after I receive my settlement
notice, I don’t agree with the amount
you value my repairs at? Is there a
dispute process I can use?
All assessors working on the Cook
Strait event have also worked on the
Christchurch Earthquakes, so we are
confident that their experience and
trade qualifications, coupled with
your input during their visit to your
building provides a robust system for
fully identifying earthquake damage
and costing repairs. Yes there is an EQC
complaints process provided, if you are
not satisfied with EQC’s assessment, but
we encourage you to first talk to us. Let
us know what other earthquake damage
you think we have not noted. We
consider such issues on a case-by-case
basis. Like all Government organisations,
EQC is also subject to the Ombudsmen
Act 1975.