Christchurch, 16 November 2014.
Subject: Concerns of residents in the Eastern suburbs.
Briefing for a meeting with Poto Williams MP. on Monday, 17 November 2014.
Empowered Christchurch is concerned about recently published documents and the media coverage of the land damage in the Eastern suburbs.
The statements in the article included the following by Jacki Johnson, CEO of IAG.
“But she also told of moves by her sector to curtail any exodus: “We worked with Government and asked what it would take for us to avoid depopulation and Canterbury didn’t have that as much as we saw with Hurricane Katrina in the US. It was a strategic intent in 2011.”
“Without risk reduction measures, the cost from natural disasters will increase.”
Recommendations from ICNZ include amongst others, to:
- “take the long-view – require local authorities to deny consent applications where taking the long view shows risks from natural hazards will increase.
- high-quality data – establish a high quality, national natural hazard database to inform decision-making such as the cost-benefit trade-offs around risk reduction.
- a hazard risk on every property – ensure there is publicly accessible information on the natural hazard risks every property in New Zealand faces.”
An editorial with the following headline was published in The Press on 11 November 2014:
This included such statements as:
“Southern Response, the Government-owned entity that took over AMI’s earthquake liabilities, and Tower Insurance have both complained about council proposals aimed at reducing the risk of flooding in low-lying areas.”….
“Worse than that, some of the greatest damage in the eastern suburbs occurred where a hazard was known but was underestimated and not adequately prepared for. The companies’ idea that they should be allowed to go ahead and rebuild and repair where there may be greater risks suggests they have learnt none of the lessons of the earthquakes.”
“The Earthquake Commission Act 1993 gives the Earthquake Commission discretion to decline, or meet part only of a claim, where the certificate of title for the affected property contains such an entry. Whether the Earthquake Commission will actually decline part or all of a claim on this ground depends in part on the nature of the natural disaster that may occur.
If it is determined by EQC that a claim for natural disaster damage will not be met due to the presence of a Section 73 covenant, then your general insurer will not be able to pay a claim under the top-up cover.”
No such document has been published for Christchurch.
“As reconstruction continues over the next 10 years, a greater focus on developing and realising the vision for greater Christchurch is needed to ensure that long-term recovery is self-sustaining.”
“The eastern suburbs of Christchurch city, which suffered the greatest housing and land damage in the earthquakes, are now experiencing greater rebuild and insurance complexities. The residents of these areas, many of whom have pre-existing vulnerabilities such as low incomes and/or a disability, are experiencing a more challenging recovery than those in other areas of greater Christchurch.
Other issues may complicate claim resolution, such as where owners have cash settled and will therefore have to manage potentially complex rebuilds or repairs themselves in a period of cost inflation. Under-insurance and/or deferred maintenance may mean some owners face funding shortfalls and need to make additional contributions to complete rebuild or repair. Helping owners understand their insurance policies, rights and obligations relating to property ownership and technical aspects of their repair or rebuild is the preferred approach to resolving claims and reaching flexible solutions that meet the individual needs of the parties. CERA will therefore continue to support owners to facilitate faster resolution of insurance claims through supporting the Residential Advisory Service to provide independent information, technical advice and facilitation.”
Further supplementary material provided:
Map generated from information from the Orbit Geotechnical Database.
This shows that South Brighton had some of the most significant lateral spreading in Christchurch.
Elevation map of the lowest lying areas of South Brighton that face the highest risk.
Source: University of Canterbury.
Erosion Risk Map of Christchurch: Map B –C10 Christchurch Map Series.
Source: Environment Canterbury.
Several photographs showing the actual land damage, subsidence caused by lateral spreading. Comparison before and after the earthquakes.
Images show actual subsidence and give estimation of increased relative rise of groundwater and consequential loss of ground bearing.
In conclusion, it appears that recognising the high risks in some of the Eastern suburbs following the earthquakes has been delayed for the purpose of avoiding depopulation.
As identified in the briefing to the incoming minister, the area’s residents frequently have pre-existing vulnerabilities such as low incomes and/or disabilities. Their homes represent their life savings.
It is also clear that many residents have cash settled.
Because of this approach to managing the recovery, vulnerable people have been severely disadvantaged, and according to statements from EQC and ICNZ, are unlikely to be covered by insurance if a natural disaster occurs in the future.
The residents affected were not underinsured.
The risks that have been identified for South Brighton for example are extensive and could all be added on the LIM reports for the affected properties when the district plan is updated.
They include erosion, subsidence, liquefaction, flash flooding, tsunami and flooding.
All these hazards may be excluded from insurance cover for the residents affected in the future.
An insurance contract is a transfer of risk. You purchase an insurance policy, and the insurance company assumes the risk. Policyholders should not be left disadvantaged after a government-managed recovery that involves excluding the main stakeholders and jeopardises their life savings. The decisions taken to avoid depopulation mean that people have been incorrectly led to believe that their land is safe when it is not.
On behalf of Empowered Christchurch we ask that you take our concerns and present our case to parliament.
About Empowered Christchurch.
Empowered Christchurch is an apolitical community group set up to support victims of the Canterbury earthquakes, to find answers to their questions and to help achieve fair settlements for homeowners.