EQC clarifies how it applies the EQC Act

Posted 08 Nov 2017 by GovtEQC
Posted in EQC , EQR

The provision in the Earthquake Commission Act which states that a property can be replaced or reinstated “only as circumstances permit and in a reasonably sufficient manner” provides practical guidance for EQC when carrying out a managed repair. 

The standard of repair is the same whether a customer is cash settled, or if their home is repaired, including those carried out through the Canterbury Home Repair Programme. 

EQC is not undertaking a managed home repair programme for the Kaikoura earthquake and is cash settling claims.

If EQC chooses to make a cash payment, rather than replacing or reinstating property, the payment must be the replacement value of the property as defined in the Act.  Replacement value means reinstating the building to a condition substantially the same but not better or more extensive than its condition when new. 

The ongoing assertion in the media that EQC intentionally uses the Act to reduce the value of cash settlements, or the quality of any managed repairs, required to meet the replacement value standard is not correct.

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