Rockfall risk removal not an insurance guarantee
Insurance cover for the Port Hills red zone is under threat, even if rockfall risk can be removed.
Earthquake Recovery Minister Gerry Brownlee said in October that Port Hills red-zoners could "make themselves green" by convincing the Christchurch City Council to lift the section 124 notices (red stickers) imposed because of rockfall risk.
Notices could be lifted if residents could mitigate against the risk, often the reason why their properties were red-zoned. However, the zoning would not change.
IAG, which owns State, NZI and AMI, told The Press it was "unlikely" insurance cover would be offered where land had been written off by the Government but the house deemed safe to occupy after rock protection work.
Spokesman Phil Barclay said it would not remediate in the red zone, but would consider paying the equivalent value if a Government offer was taken.
"A number of the risks are not located on the homeowners' property, making remediation complex and potentially out of the affected homeowners' control. We would need to work through these on a case-by-case basis."
Lumley head of earthquake response Bill Reilly said the company would continue to insure red-zoned Port Hills customers if an S124 notice was lifted.
It stopped short of following IAG's lead to pay full replacement settlements to red-zoned, red-stickered clients.
A Vero Insurance spokesman said the company understood it had no legal requirement to pay claims for properties that had not been damaged.
The company managed clients on a case-by-case basis, he said, and would pay full replacement where required.
Tower Insurance could not comment, as it was "seeking advice", a spokeswoman said.
Some Port Hills residents want to remain on their land and be rezoned green.
Sumner red-zoner Phil Elmey, a structural engineer, said not insuring homes once S124s were lifted would be "inexplicable".
"All through this process it's been clear that the risk from rockfall is quantifiable and that the risk of material damage is low," he said.
"A rock hitting a house doesn't destroy it, in general. It's not like the damage that's caused by earthquake shaking or a fire."
Elmey could not understand why insurers would not fund protection work if it was cheaper than full replacement costs.
Brownlee's "make themselves green" comment did not stack up if the land was uninsurable, he said.
The minister ruled out zoning changes, even if S124 notices were lifted. "We've made an assessment of that land and that is our assessment.
"Successful mitigation was "so hypothetical, it's unbelievable", Brownlee said.
"I don't think it's going to happen. If you find someone who can get the council to agree that their 124 notice can come off, once they've done mitigation, then it would be reasonable to ask me if we would put a green felt pen over the map to indicate it's green. In the meantime, it is not."
PLAN NO U-TURN, SAYS PARKER
Suggestions the Christchurch City Council blindsided the Government by considering Port Hills rockfall protection are an over-reaction, Mayor Bob Parker says.
Earthquake Recovery Minister Gerry Brownlee described the resolution to consider funding rockfall protection work on red-zoned Port Hills properties, passed unanimously on Friday, as a "blindside" and a "reversal" of the council's original position on the red-zoning.
Under the resolution, some owners wanting to stay in their red-zoned homes could be given up to half the 2007 capital value of their property to spend on building and maintaining rockfall protection such as fences and bunds.
Brownlee did not want to comment further yesterday, but Parker rejected suggestions the council had U-turned.
"My thought when I saw the minister's response [was] that he'd actually over-reacted," he said.
The "door was left open" from an August decision to contribute $57.9 million to red-zone buyouts.
"We were always aware there was potentially some mitigation people might be able to carry out themselves on their own land. We had never completely ruled it out."
Parker said he tried unsuccessful to contact Brownlee on Friday to "take him through" the decision.
"I think when he understands all the logic, he might alter his perspective. He's worked long and hard in the interests of the ratepayer and the property owners and he's worked very hard to bring clarity on a most complicated issue," he said.