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Pay-out for uninsured red zone home owners

Leighton Heikell
red zone
The red zone in Christchurch.  Ella Stokes, NZBS

Some former residential red zone home owners, who were uninsured, are set for a pay-out.

"The plight of people who were uninsured at the time of the quakes has been one of the difficult legacies of the earthquakes," Greater Christchurch Regeneration Minister Megan Woods said.

"It’s time to resolve this longstanding issue and provide certainty for everyone involved."

The uninsured former red zone property owners will be paid the 2007-08 rateable value of their homes, if they have not already received a payment for uninsured improvements.

The total cost for the 103 properties will be about $12 million and will be made over the next few weeks.

She said the payment will help people move on with their lives.

The announcement came after the government considered factors in response to Court of Appeal’s 2017 judgment, in the Quake Outcasts case.

A group of uninsured property owners, known as the Quake Outcasts, took the last government to court over the fairness of previous payouts.

Quake Outcasts lawyer Grant Cameron said the new offer is a big improvement on National's previous one. 

"It is the proper thing to do as a matter of law and as a moral and political obligation."

In September 2012, the then Government offered uninsured home owners 50 percent of land value only.

Cameron said one of his clients had a rateable value of $750,000, but was only offered $75,000.

"She was in her 80s and alone, so how on earth was she to recover from the earthquakes and look after herself?"

Former red zone home owners Phyllis and Michael Thom said they missed their insurance payments over a few weeks leading up to the quakes, due to a death in the family.

The couple, in their 70s, said while it has been a long time coming, they were excited by the pay-out because it meant they can move on with their lives.

Phyllis Thom said they will take their time deciding what to do with the money, but one plan was to find a new home to replace the one they lost.

Christchurch Mayor Lianne Dalziel welcomed the announcement.

"It has been a long struggle and has caused a huge amount of stress and anxiety. I warmly welcome the announcement and congratulate the Government for demonstrating good faith."

Dalziel said the new offer was what the Christchurch City Council had pushed for since the beginning.

"We have always said that every property owner in the residential red zone should have received the same offer for their property, regardless of their insurance status."

But not everyone was impressed with yesterday’s announcement.

The National Party’s Earthquake Comission spokesperson Stuart Smith said the pay-out offer could put the Crown in a predicament.

"There is now a risk property owners will choose not to pay for disaster insurance and instead wait for the Crown to bail them out. This is fundamentally unfair to those property owners who did pay for their disaster insurance."

Interview with Michael and Phyllis Thom

Interview with Michael and Phyllis Thom