House claims - over cap

• Can we see the budget before making the choice between Replicate to Policy and Build to Budget? 

  Published 30 April 2013

  While the final budget to build with us may not be known until late in the process, the signed detailed repair/rebuild analysis DRA can be used as a guideline.

• Will we receive dollar amount details of our assessments? 

  Published 24 April 2013

  We will provide an overall amount to rebuild your house rather than provide a detailed list of costings such as door handles and taps etc. If requested, we can provide a cost construction breakdown of costs from the detailed repair/rebuild analysis (DRA) which will enable a quantity surveyor to review our cost estimate in detail. If you require an itemised breakdown, we suggest you have your own assessment done and the parties can then compare.

• Will Southern Response pay escalation costs? 

  Published 24 April 2013

  We will pay escalation costs as necessary and justified. However, if you choose to delay your build, we won't pay any escalation costs.

• Does the final number on the detailed repair/rebuild analysis (DRA) include the costs of design and consents? 

  Published 24 April 2013

  The offer presented to you includes consenting fees but not design. We cover additional costs such as compliance and design costs but they need to be itemised for our consideration before they are incurred.

• Does Build to Budget include fences and driveways? 

  Published 24 April 2013

  Yes, fences and driveways are included in the budget.

• What additional costs are not included in the detailed repair/rebuild analysis (DRA)? 

  Published 24 April 2013

  We ask Arrow to provide an indicative cost estimate to rebuild or repair your existing house. If you elect to build, we will pay for additional costs as they are necessarily incurred, including geotechnical and structural engineering advice.

• When is a joint review necessary and what is the process? 

  Published 24 April 2013

  Most houses have been damaged by multiple events - predominantly the September 2010 and February 2011 earthquakes. This means that Southern Response and EQC have to establish their contributions for each event and a joint review may be necessary to do that.

  We have specialised teams working with EQC to reach resolution on apportionment. Resolving apportionment issues between EQC and Southern Response should not be a barrier to customers making a decision.

• Why is my property a repair when it is in the red zone and cannot be repaired? 

  Published 24 April 2013

  Your insurance policy responds to physical loss or damage to your house and earthquake damage. The decision by the government to offer to purchase red zone properties, rather than repair wider damage to land and infrastructure is not part of your insurance policy response.

  Repairs could be completed to a red zone repair property and that is the basis of the assessment and the resulting cash settlement offer.

• Can I visit the site of my repair or rebuild to check on the progress? 

  Published 24 April 2013

  Yes, so long as you have a suitable health and safety induction to go on-site. Before a rebuild or repair starts, there is a homeowner health and safety induction. If you'd like to go on site, please talk to your Arrow project manager who will liaise with the contractor(s) to arrange a date and time for you.

• What happens if I choose a self managed rebuild and further earthquake damage is discovered after that? 

  Published 24 April 2013

  If Southern Response is managing your repairs we'll cover any previously unseen earthquake damage discovered as part of the repair process. If you choose to take a cash settlement to do your own repairs, you'll have to pay for any previously undiscovered damage.

• If I am at the end of your build queue is it more likely I will be changed from a rebuild to a repair because of escalating building costs? 

  Published 24 April 2013

  No, because escalating building costs affect both the cost of repairs and the cost of rebuilds. We will not change rebuilds to repairs for this reason.

• Can I do my own rebuild on another site? 

  Published 24 April 2013

  Yes, this is known as a self-managed build.

• If I choose a self managed rebuild, will the cost of my foundations be covered? 

  Published 24 April 2013

  The detailed repair/rebuild analysis (DRA) is based on the cost of your previous house - including existing foundations. When you settle with us for a self managed rebuild, we'll ask you to supply a signed build contract - which includes foundation costs. If you later discover additional costs (such as more expensive foundations), these won't be covered by Southern Response. We will cover additional costs such as compliance costs, which must be itemised for our consideration before they are incurred.

• If we decide to self manage our build, do we pay for additional design and consent costs? 

  Published 24 April 2013

  We cover additional costs such as compliance and design costs but they need to be itemised for our consideration before they are incurred. Before electing a cash settlement for a self managed build, we ask you to supply a signed build contract. If you have already settled with us and then discover additional costs, these won't be covered by Southern Response.

• If we decide to rebuild on a different site requiring expensive TC3 foundations, will this be included in the offer? 

  Published 24 April 2013

  The offer presented to you will be based on the costs of your existing dwelling (including existing foundations). If you elect to build on another site, reasonable additional foundation costs will be considered for the new site. These costs need to be necessary and incurred.

• Is Arrow rewarded for making savings and completing repairs and rebuilds under budget? 

  Published 24 April 2013

  Arrow, like Southern Response, is incentivised to expedite claims settlement and deliver rebuilds and repairs as soon as practicable and on budget. Your settlement is based on the assessed cost of your repair/rebuild.

• What happens if we share our driveway with three other properties? 

  Published 24 April 2013

  Where there's damage to a shared driveway, you need agreement from your neighbours about what they want to happen, what share of the damage each party will pay and what sort of replacement materials will be used. We can act as the lead insurer for you and contact your neighbours' insurance companies, so please contact us if you're in this situation. If you and your neighbours prefer, we can cash settle your claim.

• What assurance can you give us that our scope of work won’t be changed? 

  Published 24 April 2013

  Our assurances to you during the build process are recorded in our Memorandum of Understanding for building. This sets out how we will build for you and confirms that we will consult with you before instructing the contractor to make changes. If the scope of works needs to be changed before the build work commences, we'll discuss that with you. Ultimately your protection is through our agreement to honour your insurance policy commitments.

   

• I have been told my house may have weather tightness issues and that I have to take a cash settlement - why is this? 

  Published 24 April 2013

  Under your AMI policy, if your house is damaged and can be repaired, there are two settlement options available to us. We can either repair any insured loss or damage, or we can pay you the cost to repair the insured loss or damage. 

  We will meet claims for the insured loss or damage (earthquake), but we will not pay for or respond to actual or potential historical water ingress issues unconnected with the earthquake damage.

• Who will I work with on my claim? 

  Updated 30 April 2013

  Published 23 April 2013

  If you have an over cap house claim, Southern Response takes responsibility for the management of your claim.

  We will allocate your claim to one of our 10 geographically based pods and staff from your pod will then assist you through the claims process - from claim lodgment to settlement. You can contact your pod using their dedicated phone and email contacts.  Any of the staff from your pod will be able to assist you and can refer you to an expert if this is required.

  The pod is your main point of contact as your property is assessed; an offer sent to you and you make a formal settlement election.  If you are building with us, the pod will also assist you while your property is in the pre design phase and we are addressing any site specific issues. You may also have contact with a pre design Arrow project manager during this phase.

  When your build queue position is reached you will be allocated an Arrow project manager who will work with you on the design and documentation of the house, then on through the repair or build itself.  We aim to have the same project manager working with you throughout this build period, but that is not always possible.  If your house is being built by a group home builder, you are likely to have less contact from your Arrow project manager and more contact from the building company staff. 

  If you have an out of scope claim, we will manage this alongside your house claim.  If you only have an out of scope claim this will be managed by our out of scope team.

  Temporary accommodation, contents and loss of rent claims are also dealt with by dedicated teams.

• What if I am not happy with the builder you select? 

  Published 18 April 2013

  If you don't want the first builder we nominate for you, and can present acceptable reasons for that, we will try to offer you a second builder. However, we recommend that you accept our first selection, as we make every effort to match the builder to your project and to ensure that the builder is able to work to the specified time-frame.   

  Moving to a second choice of builder may mean that our planned start date for your rebuild or repair is delayed, due to the chosen builder's capacity and workload.

• What if I don't agree with the second builder you nomate? 

  Published 18 April 2013

  If this occurs, you may want to consider our self-managed build option which gives you full control over the project.  You can use a builder of your own choice if you elect a self-managed build option (for rebuild or repair).  If you choose this option, we will require a signed building contract to confirm the work will occur.  We also need to be comfortable with the scope of the work if your house is a repair.  Southern Response will have no responsibility for the outcome of the building work.

• How do I pursue the self-managed build option? 

  Published 18 April 2013

  When we have agreed how much Southern Response will contribute to the build of your new home you can start talking to builders about your project.  

  You should then give us a contract from your preferred builder so that we can confirm that you are doing the building work in compliance with the AMI policy conditions.  We will enter into a settlement agreement with you and pay the amount that reflects the value of your claim with us (either for the rebuild or repair value of the damage to your house).

  Any costs already incurred by us toward your original plans to build with us must be reimbursed by you, or deducted from your cash settlement.

• What is a Deed of Assignment (DOA) and how does it relate to my land being remediated? 

  Published 14 March 2013

  In terms of your EQC land claim, a Deed of Assignment is a legal document that means you pass over your right to your EQC land claim to Southern Response.   This means we can manage the necessary remediation work at your property, such as site and building platform preparation (ground and foundation work).

• What happens if I pass over my land claim to Southern Response? 

  Published 14 March 2013

  When you get to the front of our build queue we can start work on your house without waiting for EQC to settle your land claim and you (or EQC) doing the necessary land remediation.  

  We will do the work that's needed at your site to provide the building platform for your new home. This may include site work, ground preparation and treatment to prepare the building platform for your new home.  We may also do other work required to remediate your land at the same time.

• Do I have to give you rights to my EQC land claim or land payment? 

  Published 14 March 2013

  No.  However we will not progress your build until any necessary land remediation is complete or your EQC land claim is assigned to us.

• If I give you rights to my land claim, will you use the EQC land money to fix the land or use it for more expensive foundations that enable it to build on the damaged land? 

  Published 14 March 2013

  We are not allocating the land money specifically, but as part of building your house we will do site preparation work (which may include land strengthening) and provide the necessary foundation solution suitable for the land.

• What parts of my land will Southern Response remediate? 

  Published 14 March 2013

  If your EQC land claim is assigned to Southern Response we will address EQC covered and identified land damage.  EQC cover for land is limited to land within your property boundary and includes: 

  • the land under your home and outbuildings (eg. shed or garage)
  • the land within eight metres of your home and outbuildings
  • the land under or supporting your main accessway, from the boundary up to 60 metres from your home (but not the driveway surfacing).

  Southern Response may also do other damage remediation work required on your land at the same time.

• If my house is not going to be built for a year or two from now, why do I need to assign my land claim now? 

  Published 14 March 2013

  You don't need to assign your EQC land claim to us until we sign the build contract.  However, we do need to know your intentions now because we need to have confidence that we will have a suitable building platform, or the resources to create that platform, before confirming your build and allocating you a place in our build queue.  If you plan to manage your own land remediation we will have no control over that work and this may affect our ability to repair or rebuild your property as scheduled and to meet our overall build programme.

• What if I want to remediate my land myself - how do I do that? 

  If you want to organise your own land remediation, you need to talk to EQC who may be able to suggest appropriate land remediation; although where damage is more serious you may need to commission your own technical expertise.  Remediation must be to specifications that will provide a suitable building platform.

• Are there any land damage situations where you are not seeking assignment of (or proceeds from) my land claim? 

  Published 14 March 2013

  At present, we are not seeking land claims where there is: 

  • Repairable foundation damage,
  • Very minor manage, or

  Very complex situations involving underground springs, culverts or retaining walls.

• What if you get my EQC land compensation and then say it is not enough to pay for the work needed to rebuild my house? 

  Published 14 March 2013

  In some cases there may be a shortfall between the land compensation and the cost of preparing the building platform.  If you assign your EQC land claim to us and are building with Southern Response, we will meet that shortfall, providing the extent of damage is not too great to build at present.

• What do I have to pay Southern Response when I sign my contract to build / get repairs done? 

  Published 21 February

  When you sign your contract with us (for either a rebuild or repairs), you need to pay Southern Response any funds you have been paid by EQC, as well as any EQC excess(es). 

  You also need to pay: 

  • Any applicable AMI excess(es) if out of scope work is being done at the same time as your rebuild or repairs 
  • Any agreed amount for uninsured or over budget work (that has been agreed between you and Southern Response and is in your contract) 
  • Any contribution to the contract works insurance premium that may be needed for any uninsured or over budget work (again that has been agreed between you and Southern Response and is in your contract)

  If any of the above payments apply to you, they need to be paid in full at the time you sign your contract with us. 

  If you have a mortgage, or need to raise finance to fund part of your repair(s)/rebuild, we recommend that you involve your bank earlier rather than later in the process to help avoid any issues when you come to sign your contract with us.

• How does Southern Response calculate the cost of a repair/rebuild per square metre? 

  Published 21 February

  The cost per square metre of repairs/rebuilds is calculated by an Arrow quantity surveyor (QS) on a case-by-case basis, taking into account all the earthquake-damaged elements of a property, as documented by the Arrow project manager.   The QS applies that information to calculate what it would cost to repair or rebuild the equivalent type and quality of the house that our customer had previously - but constructing it with modern building methods and materials - and creates a DRA or Detailed Repair / Rebuild Analysis. 

• If I choose to rebuild my house with Southern Response, can I change any of the general conditions of the build contract? 

  Published 21 February

  No. If you choose to build with us, the general terms and conditions of our build contract will apply. 

• What determined my position in the build queue? 

  Published on 19 February

  Your position in the build queue depends on when you made your formal settlement election, the quality of your land, whether you are able to live in your home and any other vulnerability factors.

• Can I keep my house or items from it? 

  Updated 21 February 2013
  Published 18 January 2013

  If your house is assessed as being beyond economic repair and you have replacement insurance cover, we will fully compensate you for the loss of the house - by making a cash settlement payment or rebuilding the house as provided by your specific policy.

  Our obligation to you is to compensate you for the loss of your house.  Our obligation to our reinsurers (and the government) is to offset our claim costs where we are able to and this is traditionally done through salvage. As part of our settlement we may exercise our right to remove anything of value before completing demolition, effectively reducing many houses to a very basic shell.   In some cases we may also look to relocate the entire house from the existing site.

  This means two things when you sign a settlement agreement with us for the replacement of your house:

  • You cannot remove items or elements from the house without our express consent - as we will assess whether we wish to salvage before demolition.  Any such action by you will effect settlement of your claim. 
  • We will actively seek to recover the items or value for anything removed from the house without our written permission.

  If you want to retain your house, please discuss this with us before you enter into any agreement with a third party. We actively seek to protect our salvage rights and require confirmation of the habitability and structural integrity of any house that is not demolished and intended for continued occupation.

  It is not possible for an owner to retain a house in the red zone, regardless of whether the owner has accepted offer one or offer two from the Crown.

  If you are considering making a request to Southern Response to retain the house, there are a number of steps to be completed.  We can discuss these in more detail with you if you want to consider this option. 

  In summary:

  • We need to be clear there is agreement between EQC and Southern Response, and  between you and Southern Response regarding the claim and settlement

     and

  • We require an Arrow report and a structural engineer's report on the property, with all recommended works completed

     and

  • An estimate of salvage value is required, which we independently validate.

  You will need to meet the cost of each of these reports, the estimates to arrive at the salvage value and also pay the agreed salvage value.

  There are other things for you to consider, relating to your temporary accommodation eligibility, future EQC cover and settlements, house insurance and repayment of any costs we have incurred to date to respond to your request.  We will also require future indemnification from you for any future action regarding the property.

  Please contact your Southern Response pod at the earliest possibility if you are considering seeking to retain the house, so we can talk through the requirements with you.

• What is EQC’s maximum payout per event? 

  EQCover is up to $100,000 + GST ($115,000) per earthquake event. You are required to pay a 1% excess (a minimum of $200 and up to $1,150) for each event. If you (or your mortgagee) receive an EQCover payment, the excess will be deducted by EQC.

  If your house is insured for replacement value and the floor area is less than 100 square metres, EQC will pay out $1,000 per square metre (+ GST) for each earthquake event, less your 1% excess.

  For example: if your house has replacement insurance cover for 85 square metres, EQC will pay you up to $85,000 + GST ($97,750) less your 1% excess ($977.50) for each earthquake event. In this example, if the damage from an earthquake event is more than or equal to the maximum available EQCover, your total EQC payout will be $96,772.50.

  If your house was damaged by multiple earthquake events, EQC may pay more than $115,000 (in total).

  Either way, Southern Response will provide top-up cover for any over cap damage for each earthquake event.

   

• What should you do with any EQC payout for your house? 

  If Southern Response becomes responsible for the repair or rebuild of your house, this money from EQC must be available to contribute (as well as any applicable EQC excess) to the cost of repairs or the rebuild of your house.

  If EQC's payment was made to your mortgagee, you will need to arrange with your mortgagee to make that money available once repairs or rebuilding commence.

• Who is Southern Response’s project manager? 

  Southern Response has contracted project managers Arrow International Limited (Arrow) to assist with the Detailed Repair/Rebuild Analysis (DRA) and subsequent management of house repairs and rebuilds.

  Once Southern Response takes over managing your claims, a visit from Arrow will be arranged to complete a DRA.

• What does Southern Response do with your claim once EQC confirms it exceeds their maximum cover for an earthquake event? 

  Once Southern Response receives confirmation that your claim exceeds the maximum amount EQC will pay for an earthquake event, Southern Response becomes responsible for and provides top-up cover for damage to the house.

  Southern Response then engages Arrow to prepare a Detailed Repair/Rebuild Analysis (DRA). This is to document the full extent of the damage to help determine whether your house is repairable or beyond economic repair.

  Note: If you have sustained land damage, EQC will continue to manage that part of your claim. Southern Response is not responsible for land damage.

• Why does the damage to your house need to be inspected more than once? 

  Some houses will require a number of visits to assess the extent of the damage from each earthquake event and determine whether the house is deemed to be under cap or over cap.

  EQC and Southern Response do their own assessments.

  Important: Even if your house has been significantly damaged and assessed by EQC as exceeding their maximum level of cover for an earthquake event, it will not be known whether it can be repaired until the Detailed Repair/Rebuild analysis (DRA) has been completed.

  As part of the assessment process, you may also be visited by specialist engineers and tradespeople to assist with estimating the full extent of the damage.

   

   

   

   

• What happens after the Detailed Repair/Rebuild Analysis (DRA) is completed? 

  The DRA identifies the costs to repair or rebuild your house within the cover provided by your AMI House Policy.

  Once established whether your house can be repaired, or if it is beyond economic repair, Southern Response will contact you with further information and organise to meet and discuss available settlement options.

  Information on your settlement options is on page 2 of your AMI House Policy document under 'what we will pay'.

  If you have damage to parts of your property not insured by EQC but covered by your House Policy, see out of scope claims.