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New Zealand is a kind nation in which residents are prepared to step in and help neighbours when disaster strikes.
When the devastating Christchurch earthquakes flattened parts of the city and killed nearly 200 people, New Zealanders were as one in providing support through fundraising or through physical efforts to help salvage as much as possible.
The delays those with damaged properties suffered through bureaucratic hold-ups and prevarications were upsetting. More than seven and a-half years on, some are still battling with their insurers for payout.
The Government has stepped up and will pay former residential red-zone homeowners 100% of the 2007-08 value for uninsured homes. The payment is for those property owners who have not already received a payment for their uninsured improvements.
Greater Christchurch Regeneration Minister Megan Woods, herself a Christchurch resident, says the plight of people uninsured at the time of the quakes has been one of the difficult legacies of the earthquakes.
The previous government’s offer of nothing for uninsured homes left many people significantly out of pocket, she says. However, the former government did, in the end, offer something — just not enough.
Ex-gratia payments will be made to the former owners of 103 insured and underinsured red-zone properties over the next few weeks. The total cost of payments is forecast to be about $12 million.
The announcement will come as a relief to those people caught in the trap of being either uninsured or underinsured. However, the precedent being set by the Government may be dangerous.
In 2013, the High Court ruled the former National government’s offer to buy out uninsured red-zone land in Christchurch for 50% of 2007 values was not made in accordance with the law.
At the time, Justice Panckhurst said National’s decision to offer those with insured land 100%, while those without insured land were offered 50%, was a blunt instrument, given many were uninsured through no fault of their own.
Many owners of uninsured properties were of modest means, some were elderly and it was commonplace their land and home was their one substantial asset.
Justice Panckhurst was satisfied the plight of the relatively small group had not been adequately considered in light of the purposes of the Earthquake Recovery Act.
The former government appealed the decision but the group named Quake Outcasts took the-then government all the way to the Court of Appeal to challenge its offer of 50% of their property’s rateable value — and won last year.
Dr Woods says the Government carefully considered a host of factors in response to the Court of Appeal’s judgement in the Quake Outcasts litigation. And it was decided the new offer should be on the basis of 100% of the rateable value for land and improvements, regardless of insurance status.
The offer is voluntary and is not a blanket or compulsory offer.
For the most part, New Zealanders will be happy the surviving red-zone residents can now have a fresh start. Only those who have lived through the earthquakes and the ongoing battles with bureaucracy can truly understand the heartbreak and frustration those people have felt.
However, opponents say the decision may create considerable risk for the Crown.
New Zealand has substantial cover for disaster insurance and most building owners pay for disaster cover — should there be another event like the Canterbury quakes, the country is in a good position to respond and rebuild, if necessary.
They say the Crown picking up the entire cost for those who did not insure against disaster is fundamentally unfair to those properties whose owners did pay.
If people take this as a signal they do not need disaster insurance, the Crown’s coffers may end up taking a considerable hit in future.