Claiming for quake damage just changed. Here's how...

11:25 am on 14 December 2016

There will be no dealing with the Earthquake Commission (EQC) for homeowners with damage from the 14 November Kaikōura earthquake.

A house at Bluff Station between Blenheim & Kaikoura, which is right on the Kekerengu fault line, was demolished by the shakes.

Insurers, not EQC, will handle house and contents claims from the Kaikōura earthquake. Photo: RNZ / Alex Perrottet

Under a new agreement, insurers will take care of the process.

Minister Responsible for the Earthquake Commission Gerry Brownlee said EQC and insurers learned "a great deal" from the Canterbury experience.

The "new and simplified" approached showed the government listened to the issues raised - and claims would be resolved "efficiently and in a timely manner".

What has changed?

How it worked in Canterbury

Homeowners with earthquake damage lodged a claim with EQC and provided their insurer's details.

EQC contractors took care of emergency repairs. The idea was that the elderly and vulnerable were prioritised, along with those living in homes that were no longer weatherproof.

If the damage was cosmetic, EQC would cash settle with the homeowner up to $15,000.

Repairs costing between $15,000 and $100,000 were managed through the Canterbury Earthquake Home Repair programme. Fletcher got the contract. Homeowners could "opt out", organise their own repairs and get paid out by EQC.

If the damage was deemed to be over $100,000 (or "over cap"), the private insurer managed the repairs and EQC paid for the first $100,000.

That was apportioned, meaning the damage tally had to hit $100,000 in one event (meaning EQC had to pay out for each damaging earthquake).

Problems and delays arose when damage estimates changed from under cap to over cap - and vice versa. People grew frustrated dealing with both EQC and their private insurer over their claims.

In some cases, homes were repaired then later deemed as over cap, for example in cases of unassessed foundation damage. That is still happening.

Then there was the shoddy repair work. At the latest count, about 10,000 Canterbury homeowners have asked EQC for second-time repairs.

For land damage, EQC assessed the cost of the damage and paid homeowners that amount (minus an excess).

Gerry Brownlee

Gerry Brownlee: "This new and simplified approach recognises we listened." Photo: RNZ / Demelza Leslie

How it will work now

Private insurers will act as EQC's "agents".

Homeowners will lodge claims directly with their private insurer, who will assess the damage and settle home and contents claims - regardless of whether they are over or under cap.

Insurers will claim back costs up to $100,000 from EQC.

Customers' entitlements under their insurance policies or under the EQC Act will not change.

Insurance assessors would be trained in the specific requirements. EQC would monitor, assess and report back on the new process.

EQC will continue to manage land damage claims.