Uninsured face battle for Christchurch earthquake money

By Derek Cheng

The Government expects to cover about 90 per cent of the cost of repairing uninsured local infrastructure. Photo / Greg Bowker
The Government expects to cover about 90 per cent of the cost of repairing uninsured local infrastructure. Photo / Greg Bowker

An estimated 5000 uninsured homes damaged in the Canterbury earthquake will have to make a case of "true hardship" to the Government to be considered for financial help.

The final repair bill for local infrastructure would likely cost it "hundreds of millions", Prime Minister John Key said, though it will be some time before the total costs will be known. He said the Government expected to cover about 90 per cent of the cost of repairing uninsured local infrastructure.

The Government has earmarked $94 million in the emergency works fund as an initial provision, and pledged $5 million as a "starting point" to the mayoral fund, available to those in need who are not eligible for state assistance such as through Work and Income.

The mayoral fund already has about $6 million. The Earthquake Commission and private insurance would cover the bulk of the costs, but there are expected to be thousands of uninsured homes.

"There are just over 160,000 homes in the Selwyn, Christchurch and Waimakariri areas, and there are estimates that 100,000 of them may be damaged, some beyond repair," Mr Key said.

"We do not know how many people are uninsured, but ... I am advised that the national average of uninsured houses is around 5 per cent."

That would mean about 5000 damaged homes are not insured.

He said the Government was open to helping out the uninsured in "true hardship", but indicated the threshold for assistance would be high.

"We have to be very careful with the way we deal with that situation, because the very strong message we need to send to New Zealanders is they need to have insurance."

People with mortgages would almost certainly have insurance, as it was normally a pre-requisite, he said.

"Those that would want to then make a claim if they didn't have insurance would need to demonstrate that they are in true hardship.

"You can imagine a scenario where an elderly person who has no debt on their home, a very limited capacity to pay any sort of mortgage, but has no insurance, has suffered substantial damage to their home."

The Government will also look to streamline building and construction consents to fast-track the repair work.

"The extent of the work down there will mean that normal consenting processes won't be fast enough," said Gerry Brownlee, who has been appointed the minister in charge of the earthquake response.

A Cabinet committee on Canterbury reconstruction, chaired by Mr Brownlee, has also been set up.

Mr Key, who will return to Christchurch today, was advised at the weekend that about 431 homes would probably be demolished and "that number will probably grow".

Initial advice from the Treasury was that the freeze in business activity would be offset by a surge in future building and reconstruction.

Ministry of Education officials are expected to finish inspecting schools today and will make a decision on when they can reopen.

About 3500 homes were still without power but most of those should have it restored soon.

Mr Key asked companies to continue to pay workers even if the business had been forced to close.

He still expects to travel to Europe at the end of the week, although he said "if my time can be better used back here, I'll stay".

There would be an inquiry into the Government response, but he thought it had been a "very slick operation".

- NZ Herald

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