Earthquake damage on rural properties – some useful things to know

Tavendale + Partners offers our support to everyone living in North Canterbury and beyond.  Below are answers to some commonly asked questions that could be useful to you as you work your way through the aftermath of last week’s earthquakes.  If you have any other questions which are not covered here, then please email us on earthquakes@tp.co.nz. One of our team will get back to you. 

Is our home covered for earthquake damage?

If you have bought insurance for your home, then you have earthquake insurance cover for your home and land. If you do not have home or contents insurance with an insurance company, you are NOT covered by EQC for earthquake related damage.

Is our business covered for earthquake damage?

If you have business insurance, or a farm insurance policy, then you will have cover under the specifics of that policy. Your business will not have EQC cover.

Exactly what cover does EQC provide?

EQC only covers personal assets, NOT business assets.  This diagram from EQC explains the detail:

For each earthquake event, EQC provides:

  • Home: up to $100,000 of cover. If the damage is more than $100,000, then your private insurance company will manage your claim.
  • Contents:  EQC provides $20,000 cover. If the damage is more than $20,000, then your private insurance company will manage your claim.
  • Land:  EQC provides the only insurance cover you have – if you have private insurance for your house.  The land is only insured where it is:
     
    • under your house;
    • within 8m, right around the house
    • your main way of access (such as a driveway) for 60m from the house
    • underneath key retaining walls or bridges or culverts within that 60m. 

If you do not have private home insurance your land is not covered by EQC.

Are the North Canterbury earthquakes of last week regarded as one or more than one event?

At the moment, the initial earthquake and all of the aftershocks count as a single event for EQC claims.  The insurance companies will advise if a second event is triggered.

What about fences or pools or other improvements near our house?

EQC does not cover these but your private insurer might.  It will depend on your specific policy so clarify with your insurer as soon as possible.

What about damage to our business and assets?

Damage will be covered only if you have purchased business insurance.

Business insurance falls into two main types of cover:

  • Physical damage:  referred to as “material damage”. This would normally cover your farm buildings and equipment. It might also cover livestock if you bought this cover.  To find out exactly what is covered, you need to contact your broker or insurer. 
     
  • Financial loss:  this covers financial loss as a direct result of physical damage to your property, affecting your ability to do business as usual. This is known as “business interruption insurance”. Your policy will have a formula for calculating the loss.  You will need to supply financial information later on.

Is our farm land insured with anyone?

No.  Other than the land cover provided by EQC for the land under and near a house, there is no land insurance in New Zealand.

Your fences and other farm infrastructure assets are likely to be covered by your business insurance policy.  Your broker or insurer can confirm.

What if we have several houses on our farm?

If they are all insured, then all houses are covered by EQC up to $100,000.

If a building is mixed purpose (eg a woolshed and staff quarters) then contact your broker or insurer. It might have EQC cover as a “dwelling”. 

The same $100,000 EQC cover applies to each house and the same contents cover of $20,000 applies to each house.

Is an empty section covered?

No.  If a section does not have a dwelling on it, then there is no land cover at all.

How can I find out more information about EQC?

For more detailed information about EQC cover, go to their website at http://www.eqc.govt.nz/ and download the Householders’ Guide which is on the homepage.

Do we have to lodge a claim with EQC and our private insurer?

Yes.  Make a claim with both.  They will talk to each other in the claim process but you need to let both organisations know you have suffered damage.  If you have a broker, talk to them and they will help you through this process.  Otherwise we suggest contacting EQC first, then  you can give your private insurer your EQC claim number.

Here is the link to the EQC page to make a claim:  http://www.eqc.govt.nz/claims/make-claim

The deadline for claims from the 14 November earthquake is 14 February 2017.

Your private insurer will have information on their website on how to make a claim.  The main websites for rural insurers are:

What should we do about paperwork and recording what has happened?

If it is safe for you to go into your home or office and get insurance records or accounts, then this would be a good idea.  We especially recommend taking photographs and even videos of your house and contents and emailing those photos somewhere safe.

If you have significant land damage near a house then we suggest you put some posts in the ground 8m from your home in all directions and take photos of this too.

Can we get on with repairing things?

If it is safe, and you need to make temporary repairs to get back into your home or keep your business running, then yes!  Do it.  But keep photos and write down what you are doing and why.  Then email it all through to your broker or insurer.

How long will it take for EQC and our insurer to deal with our claim?

Realistically, this will probably take months or longer.

The focus right now is on safety and getting access and supplies to those in need.  It will be some time before EQC and the insurers can look at damage and assess loss, then pay out on claims.

Can I rent another home to live in if ours is unsafe or uninhabitable?

Yes. You may have insurance to cover the cost of renting another house if need be.  But it will be for a fixed time and fixed amount.  Confirm these details with your insurer and be sure that you are clear as to your exact entitlement before you make plans.

Take your time, gather all the information and make a decision carefully.

What about paying my mortgage and my business loan?

We recommend speaking with your bank and accountant as soon as possible. 

T+P are here to help our clients.

Navigating the insurance process can be complex, as you may well know. We strongly recommend keeping notes about when you make a claim and all other dealings with EQC and your insurer.  It might just be handy later – even to refresh your own memory.

If there is anything we can do to help, at any stage, please call us on 03 374 9999.   If you have any other general questions relating to the earthquakes, or information that you think would be useful to others at this time, please email us on earthquakes@tp.co.nz