We’ve opted out — wish us luck!

We decided to go to the opt-out route for our quake-damaged Christchurch house. Each event caused in the region of $10,000 to $50,000, which put us in the $10,000 to $100,000 bracket. The total may come to more that $100,000, but because it’s spread over multiple events, we were still in the Fletcher programme.

I’m quite wary of the EQC assessments. It really comes down to two instances with them. The first instance came after the September earthquake. The team of two assessors examined our property. One assessor noted the hairline crack in the roughcast on the brick chimney and said it needed further assessment. The other said, ‘She’ll be right.’ Well, February came around and she wasn’t right. No, the chimney crashed through the roof and came to rest on the ceiling of the lounge, right above the tenant.

The other instance also happened at the assessment for the September quake. They used a laser level to see whether the concrete slab had moved. If it was out more than 10mm, then it was considered a problem. The first measurement indicated that it was, in fact, out by 10mm-11mm. They rechecked it and, mirabile dictu, it was fine. Since I don’t happen to have my own laser level, I couldn’t verify any of this. It just reminded me of a casino: the house — EQC — always won.

Then, there have been the rule changes. This isn’t an insurance contract, in which the terms are set at the time of the event. EQC keeps changing the rules and they don’t even necessarily tell you. We had a devil of a time being reimbursed for getting the chimney removed. We figured it wouldn’t be a problem, because the removal cost less than the $10,000 cap for emergency work. It turned out that they reduced the cap to $2,000 between September and February, but didn’t make it widely known. So what would have been a simple reimbursement turned into months of proving that, yes, a chimney crushing a collapsed roof does rather constitute an emergency.

The latest rule change to verify that the house always wins is also about reimbursements. From the start, you’ve been able to opt out of the Fletcher programme. If you were in our damage bracket, you could wait in line for Fletcher or get another contractor. EQC would then pay the contractor. Now, the new rule is that EQC won’t release any money until the work is done. Then, they will reimburse you off the contractor’s invoices. That is, you now need a cash float of up to $100,000 (or more) if you don’t want to use Fletcher.

Mostly, it looks like a way to keep people in the Fletcher programme. Were too many people opting out?

Perhaps they were, and for good reason. We had already lowered our expectations after the stories we’ve heard of slap-dash repair work. Then, we heard that the rates for painters have been lowered. The explanation sounds good — rates were above market rates, and we can’t let the painters gouge the government. But — news flash — there was a catastrophe. Prices for lots of things are above normal market rates. Is it any wonder that just when demand increases, so does the price? We’ve heard from several people that the quality of painting wasn’t great. This should drive it down even further.

The other problem concerns rental properties. Fletcher just tells you when your number comes up, and you have three days to three weeks to clear out. Apparently, landlords may be on the hook for finding alternative accommodation for tenants. There were also some other legal issues listed in a long letter we received.

At least one contractor sees this as an opportunity. We were referred to one who is working with landlords and timing repairs around the rental contracts and vacancies. It may ending up costing a little more, but the Fletcher option was also going to have hidden costs. Of course, the new reimbursement rules are making it harder, but we are working through those issues.

The next step is verifying the scope of work. That should happen over the next week. Then, hopefully, they can start work in a few weeks and the house will be repaired by the end of September. I’ll let you know how it goes.

*Other people wrestling with these issues and writing about it are Eric Crampton, Islay McLeod, and folks in Avonside.