18 Dec 2015

$635m quake insurance payout for Christchurch council

5:34 pm on 18 December 2015

Christchurch City Council has reached an agreement with its insurer for a $635 million payout for earthquake damage to civic buildings.

The council had been in a protracted dispute with its insurers, Local Authority Protection Disaster Fund and Civic Assurance, over the value of the claim due to earthquake damage.

The agreement was for claims on all of the 1600 above-ground assets and for losses caused by interruption to business.

That was in addition to the $201 million already paid out for damage below ground, and a $59 million settlement with the Earthquake Commission, the council said.

Council chief financial officer Peter Gudsell told Checkpoint the deal would save time and money in the long run.

"What we're trading off with money now, and a reasonable settlement now, is the litigation, the time frame, the requirement to re-instate the assets and claim back for the cost."

Christchurch City Council expected to get the full and final settlement in February, Mr Gudsell said.

Christchurch mayor Lianne Dalziel was happy to have financial certainty.

"Not only does this settlement resolve one of the most significant financial risks that we inherited when we were elected in 2013, but just as importantly the nature of the settlement means that we are now free to make our own decisions about how best to use those funds - what gets done and when."

The settlement was the fairest outcome for residents, she said.