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By now, as a home, farm, or business owner you will have made (or will soon be making) claims with your insurance company for damage to buildings, plant and equipment and/or personal belongings during the 14 November earthquake and numerous subsequent aftershocks.
We thought it might be helpful to pass onto you some of the insights and strategies we've gained over the years handling a considerable number of insurance claims from the (other) Canterbury earthquakes.

First steps

  • Look after yourself and your loved ones.  Claims can be made to EQC up to three months from the date of the earthquake.  If your property seems unsafe, please don't go inside.
  • Contact EQC and your insurer or insurance adviser/broker.  Your insurer may help you lodge a claim with EQC.
  • If you need to take, or have already taken, urgent action to make your home safe, secure, weather-tight and sanitary, record the work done and take photos.  Keep copies of any bills or invoices for those repairs.

General policy coverage

Business / farm

  • If you own a business, or commercial or farm buildings, and have insurance cover, you're normally covered for earthquake damage to your buildings, plant, equipment and other key operating infrastructure under either a 'material damage' policy or, if you have comprehensive farming or business insurance cover, a number of separate polices.  Often, earthquake cover is an optional extra, so you do need to check your insurance documents to see what cover you have.
  • You will likely have a "sum insured" which is a limit on what your insurer will pay – you should check your policy schedule or summary.  EQC aren't involved with business or commercial earthquake claims.
  • Some policies may also have a further sub-limit (within the sum insured) on cover for earthquake damage.  You will also need to pay an excess, which is normally a percentage of the insurance response. 
  • On-farm roads, tracks, bridges, culverts and other access-ways may have been damaged through landslips and ruptures.  While bridges and culverts will usually be covered, it's less common for farm tracks to be covered, so do check your insurance documents.
  • It can be tricky to identify where in the policy different types of farm infrastructure are covered.  Take advice on this from your insurance adviser/broker or lawyer if you need to.
  • Business insurance is different to residential insurance.  Usually the insured, rather than the insurer, needs to formulate the claim for earthquake damage to the building; scoping the damage and submitting a repair proposal.  In due time you will almost certainly need engineering advice to assist you with this.
  • You may also have cover for losses you suffer if your business is interrupted as a direct result of the earthquake damage.  Almost always, a prerequisite for business interruption cover (BI) is physical damage to the building (or a building) from which the business operates or business plant.  However, the damage to your building or plant and infrastructure does not necessarily need to have been catastrophic before you can make a claim – if you have suffered some material damage, and your business has been interrupted, or negatively affected, then it is likely you will have a BI claim. 
  • In some situations, there may be some BI cover available, even if your business premises or plant have not suffered physical damage. 

  • For residential homes, if you have insurance, EQC provides the first layer of cover for earthquake damage up to $100,000 plus GST (called a "cap payment").  You pay a 1% excess.
  • Your insurer provides a 'top-up' if the costs to repair damage exceed EQC's cap payment.  For many, when taking out new insurance cover or renewing existing cover, you will have nominated a defined sum.  This sum (with possibly only certain exceptions) is, like the 'sum insured', the limit to which your insurer will make any payment and includes the EQC cover.  Please check your policy summary. 
  • EQC also provides cover for contents damage up to $20,000 plus GST.  After that, your insurer provides a 'top-up'.  Again, you would likely have nominated a set limit for contents cover.
  • Under either a house or contents policy, insurers also provide cover for temporary accommodation costs while you're unable to live in your home, even if your claim ultimately remains under the EQC cap.  You will need to contact your insurer first, as they must agree that your home is uninhabitable due to the earthquake.  While rental costs (or sometimes motel costs) are covered, you won't be covered for additional costs such as travel, letting fees, utilities or meals.  Reasonable moving or storage costs are often covered – check your policy, or with your insurer if you don’t have your wording to hand.
  • If your house was under construction or undergoing alterations at the time of the earthquakes, you should still contact EQC and your insurer.

Insurance claims and what to expect
  • Take pictures of the damage (to buildings and contents) for insurance claims.
  • Keep all damaged items for inspection – if you have to dispose of perishable items, take photographs and make a list of them.
  • Don't start any non-essential repairs without your insurance company's approval.
  • Your insurer will need to arrange a site inspection to assess the damage to your buildings.  This will involve at least a loss adjuster or project manager, and may also involve a structural engineer.  Your insurer will need some time to properly assess and respond to your claim, but a considered assessment is much preferable than a rushed assessment that doesn't capture all the detail – so try to stay patient.
  • For homeowners, EQC may also wish to arrange a site inspection, although we expect after the Christchurch earthquakes that the assessment process will be streamlined to avoid doubling up of EQC and insurer assessments.
  • Once your insurer (or EQC) has assessed your home or building, you'll receive their report on how they intend to settle your claim.  At that point, you'll likely have a number of options available to you and how your claim is settled can depend on the option you take.
  • If you think you will need to make a BI claim, you will need supporting financial evidence from, for example, your accountant.  Under your BI policy, you will likely have an allowance for claims preparation costs, as BI claims can be complex.

Update – 29 November 2016
Please see the links below to two documents which provide further information on issues relating to the recent earthquakes:

Health and safety obligations
Disruption to work

  • Shift cancellation
  • Disruption for natural disaster
  • Taking leave
  • Flexible working

We're here to help
We're here to help you where we can. 
You no doubt have many pressing matters to focus on at the moment, particularly trying to restore your home, belongings and/or your premises, getting your business back up and running and helping your friends and family.  When the dust starts to settle though, and you're able to turn your attention to your insurance claim, we're available to guide you through the process and provide advice and strategic guidance for any complexities.

Please contact Emily Walton, Jonathan Pow or Sarah Ulmer.

To download the above as a printable PDF please click here.

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