EQC rules unfair, say landslip-affected owners

ON THE BRINK: Mark Goodier's house has been deemed too dangerous to live in but the Earthquake Commission says it is undamaged.PHOTO/ STUART MUNRO

Wanganui people unhappy with Earthquake Commission payouts on their damaged properties are to get help from a leading Christchurch advocate.

A group of about 30 met on Wednesday night to support each other and consider their options, Mark Goodier said.

Most of them were like Jill Gregory, whose story appeared in October 27's Chronicle - affected by landslips rather than flooding.

"We are frustrated because the focus has been on the flood victims and, yes, we feel sorry for them. They have had a lot to deal with, but they can see an end to their situation. They will be back in their houses shortly, whereas most of us can't see an end to it, and we could lose everything we have worked for."

One result of the informal meeting is Wanganui District Council getting Bryan Staples, of Christchurch's Earthquake Services, to come and talk to the people affected. Mr Staples is a former Earthquake Commission (EQC) staff member who has helped Christchurch property owners in their struggles against the commission.

The Goodiers' house has been red-stickered and they are renting one nearby.

Mr Goodier said a slip had taken out the footings of his garage and there was a bit of subsidence in his house. EQC has said there was no damage to the house and was offering $113,000 - the value of a wrecked retaining wall combined with the value of the land affected.

It has estimated those repairs will cost $210,000.

Its policy is only to pay for repairs to land either underneath or within eight metres of a house, outbuilding or accessway. It will pay only for either the value of the land affected or the value of the repairs - whichever is less.

In most Wanganui cases, the value of the land is less, because Wanganui land is low in value compared with places like Auckland.

Mr Goodier said there were others in the same situation.

"They're all on the same theme - that there's a huge difference between the EQC payout and the actual cost of the repair, and that's all due to the land prices in Wanganui. It's a flaw in the EQC process that doesn't take land values into account."

He added that EQC's estimates of repair costs were "notoriously low" - 20 to 70 per cent below actual costs. And he queried the amount EQC spends on engineering firm Tonkin + Taylor's property assessments, which property owners are not allowed to use to do repair work.

"It's a waste of resources. Tonkin + Taylor must be making lots of money and their reports don't have to stand up to scrutiny."

His impression is that both EQC and insurance companies systematically pay out as little as possible.

"EQC hides behind legislation and the insurance companies just tuck in nicely behind that, because they're not liable for anything until EQC have settled.

"On top of that there has to be more than $100,000 damage to your house before your home insurance has to kick in."

The Goodiers are stuck because EQC has said there is no damage to their house, yet their home insurance loss adjuster said there was clearly damage to it. To dispute the EQC assessment they would have to pay for their own engineering report, and would only be reimbursed if EQC agreed it had made a mistake. Mr Goodier doesn't trust the commission's judgment on that and said an engineer's report could cost tens of thousands of dollars.

EQC is funded by a percentage of payments to insurance companies. Mr Goodier said the result was unfair. "The issue is that we pay the insurance companies and we're still in a situation where we're not covered for repair, and that can't be right."

He's hoping advocate Bryan Staples can help.