Earthquake Commission can impose excess levy under the regulations
Two adjoining properties affected by a landslide – EQC levied an excess on both properties in accordance with the Earthquake Commission Act 1993 (Regulations 1993, reg 4(1)(b)—the Ombudsman concluded EQC was entitled to impose the excess
When land slipped onto adjoining land the owners of each piece of land lodged claims with the Earthquake Commission for the damage caused to their respective properties. The Commission levied an excess on each claim and the owner of the property on to which the land had slipped asked for the decision to be investigated because the slip had not originated on his land.
The Earthquake Commission Act 1993 makes provision for the insurance of residential land against damage caused by natural disasters. The insurance provides landslip cover on property which the owner has insured against fire with a private company. In this case there were two claims from two insured persons, each having separate insurable interests. Regulation 4(1)(b) of the Earthquake Commission Regulations 1993 provides that there is an excess on residential land:
(1) For the purposes of clause 1 of the Third Schedule to the Act, and subject to sub-clause (2) of this regulation, the excess is –
(b) Residential land - $500 multiplied by the number of dwellings in the residential building which is situated on the land, or 10 percent of the amount payable under section 29 of the Act, whichever is greater, to a maximum of $5,000.
The Act is therefore structured in such a way that each of the claims was subject to the excess provisions of the Act, notwithstanding that the losses had been caused by a single event. If both properties had been totally destroyed, each property owner would have been entitled to a maximum claim under the Act, less the excess. As the decision to levy the excesses appeared to be in accordance with the Act, and the provisions of the Act did not appear unreasonable, the complaint was not sustained.
This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.