Christchurch rebuild raises questions over insurance settlements

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6 August 2012

The rebuilding of the Christchurch CBD will respect property rights but does require sensible solutions to restore the city, according to Earthquake Recovery Minister Gerry Brownlee.

He told a teleconference last week he will use his emergency powers to acquire existing buildings under the program to build a new low-rise inner city with parks, cultural and commercial facilities.

The plan has raised questions about insurance settlements for buildings in the CBD.

Most claims have been paid for total loss but the situation is less clear for buildings that can be repaired. Many of these claims are close to settlement and it is unclear how the claims will be affected if the buildings are subject to compulsory purchase orders.

Mr Brownlee told insuranceNEWS.com.au that existing property rights will continue.

“If the insurers want to repair these buildings they should repair them,” he said, adding that at some point the state might want to acquire the buildings.

The redevelopment plan allows buildings as high as 28 metres – about seven storeys – and the Government is wooing foreign investors to participate in the rebuild.

Mr Brownlee says the geotechnical outlook for Christchurch is positive and improving, and the Canterbury Earthquake Recovery Act gives him extra powers to “make things happen” for investors, such as to acquire land and amalgamate titles.

He says the cost of land will be considerably lower than prior to the earthquakes and the quality of new buildings much higher. The cost of construction will be no higher than in Auckland or Wellington.