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EQC agrees to make ex-gratia payments for ‘onsolds’

August 15, 2019


Partners Helen Smith


EQC has just announced that it will make further payments to owners of earthquake-damaged properties where:

  • The current owner purchased the property after the earthquakes and before 15 August 2019;
  • Post sale, the property has been found to have incomplete or insufficient repairs because of unassessed damage or defective repair;
  • The cost of repair is more than the EQC cap; and
  • The private insurer will not cover the cost of repairs.

EQC has said that the basis for the payments will be the standard of replacement under the insurance policy that was in place at the time of the earthquakes. Claimants will likely need to produce evidence of their intention to carry out the repair work (such as a building contract).

EQC does not have to make these payments so they will be made on an ‘ex-gratia’ basis and they will only be available for 12 months until 15 August 2020. There will not be a strict legal entitlement to the payment in the same way as a payment under an insurance policy. Homeowners will therefore have less ability to challenge the calculation of payments or process that EQC adopts. 

Despite the ‘ex-gratia’ nature of the payments, this announcement will bring hope to claimants who have been told that, because they purchased the property after the earthquakes, they are limited to indemnity value.

From a public policy point of view, EQC insisting on homeowners using the funds to repair the property may also lead to improved housing stock in Christchurch.

Please get in touch with our insurance experts if you would like more information or advice on your situation.