The following questions were posed to EQC via the Customer Advocacy Group. Star community leader, Carmel Jagger is all over the big questions in the community so expect her to keep asking the hard questions. Responses are from EQC.
How does EQC intend to settle land claims for cross leave titles when all owners within the cross-lease own the land in equal shares but damage to insured areas is not equal?
The standard approach for land damage relating to individually insured cross-lease flats is to pay each flat owner for any covered damage to their exclusive land area and to split any covered damage to shared land areas between the flat owners based on their ownership obligations.
Will EQC require repair of ILV land prior to CHRP undertaking repairs to the building?
In order to expedite the repair of Canterbury homes, EQC has decided to continue to undertake CHRP repairs to buildings in advance of determinations of whether associated residential land has suffered ILV damage. EQC is in the process of developing its policy for the settlement of ILV damage claims and expects to finalise this in the first quarter of 2015.
If EQR intend to carry out repairs to building prior to any land repair who is responsible for any subsequent damage to the building?
EQC is considering this issue as part of its development of a policy for the settlement of ILV damage claims. EQC is in the process of developing its ILV policy and expects to finalise this in the first quarter of 2015.
How is DOV relevant as part of the assessment process for ILV if repair of land is consentable and feasible?
DOV is not specifically used to assess and confirm ILV damage. However, as well as geotechnical investigations, an assessment is undertaken to confirm that the property has suffered a loss of utility or value as a result of the property being more vulnerable to liquefaction damage in a future event.
EQC has not yet finalised its approach to settling ILV claims, however its preference is to settle claims based on the costs of repair where this is feasible and consentable. Where a repair is available then DOV is a settlement method that may be utilised.
If a DOA is given to an insurer does EQC still make settlement to the homeowner?
No. In general, where EQC is on notice that a customer has assigned the benefit of a claim to the insurer, EQC is obliged to pay the insurer in accordance with the DOA. However, this depends on what exactly has been assigned.
Because every Deed of Assignment is different, it is important to look at the individual terms when determining who to pay. For example, in some cases a customer will assign the benefit of the building claim only to the insurer, or sometimes building and land. If only the building claim is assigned, then any land payment will go to the customer (not the insurer). In other cases, the customer might only assign one of their claims and not all claims for the property.
We note that if there is a mortgage against the property EQC will generally be obliged to direct payment to the mortgagee (the bank) unless the mortgagee has approved the assignment to the insurer.
It will also be important for customers to check the terms of their agreements with the insurer to see what they have agreed to the insurer using the money for.
We know of homeowners who have not accepted the Crown’s Residential Red Zone offer and remained on the property who have not received notification of ILV or IFV potential – can this be explained? If they are neither ILV or IFV when can they expect their land claim to be settled?
The red zone data as to who has accepted a pay-out from CERA and who has not is still being worked on. We have deliberately excluded these properties until the data is clear enough to use.