EQC 'cocked up' with Christchurch family's burnt and quake-hit home, lawyer says
Both the Earthquake Commission (EQC) and insurer IAG are in the wrong over a Christchurch home wrecked by fire and earthquakes, an insurance lawyer says.
Georgia Scott and Mike Rodgers and their two young children are living in their sleepout after a fire 13 months ago revealed botched earthquake repairs.
The fire damage cannot be repaired until the foundations are replaced, leaving their Heathcote Valley home uninhabitable. Neither EQC or IAG will pay the $250,000 needed to remedy the repair, which was completed and signed off for the previous owner through EQC's repair programme.
Lawyer Peter Woods of Anthony Harper Lawyers said neither EQC or IAG's responses to the couple's claims would stand up in court.
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Woods said he was "particularly alarmed" at IAG's claim it was not liable because the previous owner got market value when selling the house. IAG has settled the fire claim, but said it would not pay for quake repairs as no loss had been suffered by the original insured party.
"That's not correct. Liability for loss is totally irrelevant to market value," Woods said.
"Does IAG really think because someone made a mistake that it is off the hook?"
EQC has admitted to the couple the repair scope was wrong, but said that having paid up to the $100,000 legal cap, it would pay no more.
Woods said EQC had committed a breach, so was liable for remedying that and the cap did not apply.
"It shouldn't be the owners' problem. If the insurer plays hard ball, EQC should deal with it and fix it, then sort out the cost with the insurers.
"EQC cocked it up, it should fix it."
Earlier this month Christchurch Labour MP Megan Woods put written questions to EQC Minister Gerry Brownlee asking whether the commission had received legal advice on its liability for remedial repairs and whether it was liable if remedial repairs went over the $100,000 cap.
Brownlee has not yet replied.
Woods said Scott and Rodgers were in "a terrible situation" when they had done everything right.
"This is hugely concerning," she said.
Before buying, the couple commissioned a building report, ensured the quake repairs had been signed off and had the previous owner's claims reassigned to them. The fire struck just eight hours after they moved in.
"A homeowner shouldn't be locked in a battle between EQC and an insurance company. And going to court is expensive and protracted," Woods said.
"What this couple need is their home fixed. EQC needs to fix it and deal with the private insurer at the back end."
She said the situation "unfortunately" did not surprise her.
"The standard of earthquake repairs is catching up with people now, a few years down the track. There are too many people with broken homes."