Quake impoverishment at the stroke of a pen
Red-zoned residents in Christchurch are reeling from a change in rules.
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Infrastructure
Insurers are taking advantage of Department of Building and Housing rule changes to save millions of dollars.
The new rules mean that insurers have reassessed broken homes and have reclassed them as repairs rather complete rebuild.
But – here’s the Catch 22 – the houses can’t be repaired where they are because they are on red-zoned land.
So affected homeowners must move elsewhere and are finding they are significantly shortchanged when it comes to the cost of a new home.
In some reported cases the difference between the first write-off assessment and the second repair reassessment is more than $100,000.
The new rules were brought in at the end of 2011.
It is unclear who drove the changes – government or insurers.
In hindsight it appears red zoners who signed up for the government and private insurance compensation package before the rule changes have won out.
The government payout was based on 2007 rateable values.
Homeowners had a choice of taking the government payout on their land and their house; or a government payout on land but private insurance payout on the house (more beneficial if the insurance was for full replacement rather than current rateable value of the house).
One example of the Department of Building and Housing rule change involves the extent of floor tilting.
No repairs are considered necessary if a timber or concrete floor has up to 50mm (5cm) difference in level between two points greater than 2 metres.
Foundation re-levelling is required a timber floor has an overall variation in level of between 50mm and 100mm or if a concrete slab has an overall variation of 50mm top 150mm, and there is “no serious cracking”.
Foundation replacement is required if the timber floor has an overall variation in level of more than 100mm, a concrete slab has an overall variation of more than 150mm or there is significant cracking to floor or foundations.
Chris Hutching
Thu, 12 Apr 2012
Thu, 12 Apr 2012
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Quake impoverishment at the stroke of a pen
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