Whanganui property owners affected by slips after the June floods say they are being left tens of thousands of dollars out of pocket due to unfair EQC rules.
The EQC is offering payouts equivalent to the value of the land damaged, rather than the cost of carrying out repairs.
Whanganui mayor Annette Main planned to appeal to the government to help compensate residents whose land was damaged by the floods.
The community had been penalised for living somewhere with low land values, rather than in Auckland where land values are much higher, she said.
A discussion on EQC payouts was needed.
"It's not right that where you live should affect what happens to you in these situations."
A chunk of Bastia Hill resident Mark Goodier's land slipped away in the severe weather which hit the region in June, and his property has been red-stickered.
He has been offered $113,000 in compensation.
EQC estimates it will cost him $210,000 to repair the damage, a figure Mr Goodier believes is at least $50,000 shy of the real cost.
The EQC's rules did not work for home owners in the provinces, he said.
"That's made it an impossible situation for Whanganui residents because the land values here are nothing like the land values in Wellington or Auckland and it just means we've got a huge shortfall in our payouts."
The EQC has also decided there was no damage to Mr Goodier's home, despite the fact its garage is hanging over the edge of the slip.
He was getting his own geotechnical and engineering reports done to challenge its findings, he said.
"That's tens of thousands of dollars that we've got to find just to challenge them. They are hiding behind the legislation rather than just coming out and doing the right thing.
"They hide behind the legislation so that they don't have to make the payouts."
Mount View Road homeowner Val Southcombe has also been left with a shortfall.
"It's going to take $115,000 to make my place safely liveable, that's just the section and they've given me $21,000," she said.
"And while I'm grateful to have that money just sitting there, you know, it's actually a joke, isn't it."
The affected homeowners were very upset at their treatment, she said.
"Everybody is pretty wild about the whole thing and disappointed, you know, some more so than others.
"Some are angry, some are grieving. We're all grieving. I think I'm not then all of a sudden some little thing comes along will happen and I'll think gosh someone's died and it's actually my house."
She said the EQC had accepted that her home had also been damaged but she was still waiting find out what she could expect to help her with repairs.
For its part, an EQC spokesperson said it was legally bound to pay the lesser of the value of the damaged land or the cost to repair it.
"The Earthquake Commission is committed to ensuring customers receive their full entitlement under the law for natural disaster damage," he said.
"The way that land claims are settled is defined by the law (the Earthquake Commission Act 1993) and, while the EQC can understand the customers' concerns, it has to apply the law."
The EQC remained available to help people with their claims, he said.
"The EQC has worked closely with its Wanganui customers to explain their entitlements and limits of the cover they receive from EQC. Each customer has a claims manager to work with them and we will continue to work with customers to ensure they receive their full entitlement."
Meanwhile, affected homeowners have called in Christchurch consultant Bryan Staples who has been helping residents there with their battles against the EQC.