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EQC Liable for Increased Flooding Vulnerability to Land

The following article was written by Brian Burke

In a judgment dated 10 December 2014 the High Court concluded that increased flooding vulnerability constitutes damage to insured residential land. 

Widespread land damage was caused by the Canterbury earthquakes between 4 September 2010 and 23 December 2011.  EQC has identified land which is subject to increased flooding vulnerability due to subsidence.  Some land owners will now be entitled to make a claim to EQC for either the cost of land remediation or the loss in value of the land due to its increased vulnerability to flooding. 

The High Court said that EQC would have the choice of either remediating the land or paying the insured owner for the loss in the value of the land.  The High Court further said the same compensation principles would apply to land which is subject to increased liquefaction vulnerability. 

EQC has estimated that over 13,000 properties in the Canterbury region have suffered increased flooding vulnerability and/or increased liquefaction vulnerability as a result of the earthquake sequence.  EQC has adopted a complicated formula in order to assess whether particular land qualifies for compensation.  Disputes are sure to arise in relation to whether land qualifies for compensation and, if so, the amount of compensation EQC should pay.  It will be important for those who may be affected to take expert advice at the earliest opportunity.  


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