5 Tips for dealing with landslip and flood events

November 2023

The extreme weather events of early 2023 caused significant damage to many properties throughout the North Island.  Since that time property owners have been dealing with building experts, insurers, EQC and Councils to obtain assistance and funding to remediate their properties.  

Here are 5 tips to assist you in working through the issues.

1. Know your EQC entitlements.  Anyone with a contract of fire insurance in respect of residential buildings is deemed to be insured under the Earthquake Commission Act against “natural disaster damage” to land and buildings.  This includes damage that is “imminent” as a direct result of the natural disaster.  In most cases EQC will cover some, but not all, of the land within your property.  The amount of the land cover will be capped at the value of the land affected (the “land cap”).  EQC also covers damage to buildings, subject to a maximum of $300,000 + GST (or less if the policy was renewed before 1 October 2022). Your private insurer will normally top up building repair costs in excess of that amount.       

2. Review your insurance policy:  Your insurer will act as agent for the EQC cover, and is the point of contact for additional cover under the insurance policy.  Your insurance policy is unlikely to provide additional land cover, but may include items such drainage and fencing not covered by EQC.  Your policy is likely to cover the cost of repairing your home in excess of the EQC building cover, subject to the sum insured. 

3. Unsure if the scope of work is correct? Your insurer will appoint a loss adjuster who assesses the extent of the damage, the scope of work required to remedy the damage, the cost of repair and the land cap, amongst other things.  Often these assessments under-estimate the extent of the problem.  We work with well qualified structural and geotechnical engineers, building surveyors, quantity surveyors and valuers who can assist in assessing whether the insurer’s scope of work is adequate.  We can recommend appropriate experts to review the insurer’s scope so that you have confidence the work to remedy the damaged land or buildings has been properly assessed.

4. Seek legal advice on settlement offers:  At some stage your insurer will make a settlement offer to resolve your claim. Grimshaw & Co is able to assess whether EQC and your insurer have undertaken appropriate expert investigations, determined your full entitlements, and properly calculated the amount of your entitlements under the EQC Act and the insurance policy.  The experience of home owners after the Christchurch earthquakes highlights the importance of property owners taking legal advice before accepting any settlement proposals from insurers. 

5. Keep up to date with buy-out information. Councils have put in place a Risk Category framework for assessing properties affected by the weather events.  Auckland Council is offering a buy-out to owners in Risk Category 3, based on 95% of the value of the property less any insurance payout or 80% for uninsured properties.  Owners will have one month to consider the Council offer, with the Council contributing $5,000 towards legal and professional fees.  If you do not accept the Council valuation, you may follow a dispute process.  Further information can be found here. You may also sign up to the Auckland Council’s recovery newsletter, which provides updates. The process being undertaken by the Hawke’s Bay Regional Council can be found here.

We understand the distress and financial difficulties faced by property owners impacted by the severe weather events.  Grimshaw & Co can guide you through the claim resolution process, advise on buy-outs, and provide peace of mind that everything is being done to help you move forward.