EQC Cover for Land

Dr Duncan Webb, Lane Neave

26 June 2017

If you are in any doubt about your claim it is recommended you seek legal advice.

The Land

  • The “Land Holding”

    • underneath the building

    • within 8 metres of the building

    • the land holding—

      • the main access way (within 60 Metres)

    • bridges and culverts

    • all retaining walls and their support systems (within 60 metres and necessary for the support or protection of the building or land)

Damage

  • Adverse change affecting usability

  • EQC categories (as per Cam Preston’s presentation)

  • Can be:

    • Obvious damage

    • Adverse chance - exacerbation (flooding liquefaction)

  • Cannot be:

    • stigma

    • actual flooding

    • pre existing vulnerability (some mass land movement)

    • risk from adjacent land (Kraal)

    • change to drains rivers (EQC Flooding Case)

Amount of land insurance

  • The value of the damage up to the value of the insured land

    • Not all land is insured

    • For retaining walls , bridges & culverts - indemnity value.

  • Loss of value where repair unlikely due to:

    • No intention to repair;

    • New owner;

    • Not feasible;

    • Not permissible;

    • Disproportionate or unreasonable to repair.

  • Value of land lost where total loss.

  • Indemnity value where no actual repair.

Land damage vs. building damage

  • Work “on the building” such as raising it above flood levels is building remediation and not land remediation (EQC Flooding Case).

  • Building damage requires a:

    • change to the physical state or integrity of the structure or materials that comprise the body of the house erected on the land including its foundations (EQC Flooding Case)

  • No damage simply due to building subsiding with land (that is land damage)

  • “Punching” into land problematic

The EQC land claim assignment problem

  • What is building damage / what is land damage

    • Insurer insured the house on the land as it was pre earthquake

    • If there is a land payment it may relate to land other than that under foundations

    • If the site is damaged the insurer can require the owner to provide an undamaged site to build on

    • The insurer is obliged to repair the house to modern

legal requirements (e.g. Code compliant)

  • Some land payments are likely to be very small

Some Issues

  • Insurer’s offering cash settlements often require assignment of land payments where enhanced foundations required

  • EQC tortuously slow

  • Land payments very modest in general

  • EQC difficult to deal with

  • Land information is technical

  • EQC constrains itself by internal policies

Strategy

  • Be pro-active

    • Provide your own information (or other information e.g. CCC)

    • Get all of EQC’s information

  • Potential to revisit EQC payments - especially if land repairs actually undertaken

  • Do not be overwhelmed by technical information

  • Your own experts may be useful (but expensive)

  • Be clear on your own positon (repair / retreat / ignore).

  • Be alert to any payments based on valuations.