Ask the seller or real estate agent:
- Was the property damaged in the disaster?
- Were any insurance claims made?
- If yes, have the claims been settled yet?
If no claim was made
Take extra care looking over the home and property. Commission a report from an expert, eg an engineer or a building surveyor. Ask them about their area of expertise and any limits to what they can advise you on. They should pay close attention to:
- uneven floor levels
- stuck or loose doorways into rooms
- stuck or loose doors on cabinetry
- any leaking or cracking.
Search accredited building surveyors(external link) — Building Officials Institute of NZ
Find a building inspector(external link) — NZ Institute of Building Inspectors
If claims were made
Find out which insurers are involved. It might be EQC alone, or there could be claims with EQC and a private insurer, eg if the cost of repairs go over the EQC cap.
Ask if settled claims were resolved through a cash settlement or managed repair. This casts light on what documents and evidence you should check.
Check what you will be entitled to if any insurance claims are transferred to you:
- EQC claims, or parts of claims, transferred to a new owner give that person the same entitlements as the previous claim holder. This means the new owner will receive any remaining entitlement up to EQC’s cap for a natural disaster event.
- Private insurance claims work differently. A new owner might not be entitled to the same benefits assigned to the previous owner. Seek legal advice to understand what transferring any claims would mean for you.
Ask the claim holder to sign a privacy waiver so private insurers can consider sharing details with you. Otherwise they can only liaise with the person claims are held by, eg the seller or original claimant.
What to watch out for: Insurance claims are held by people, not properties. Ask the seller or agent if all claims have been transferred to the most recent owner. If you don't know who made any previous claims, there is no way to find out more.
If claims were settled
An accepted insurance claim is settled by either:
- Cash settlement — money to pay for repairs.
- Managed repair — the insurer pays tradespeople to complete repairs.
The insurer pays the property owner directly if there is no mortgage. If there is a mortgage, cash settlement goes through the lender. The owner and lender then agree how to release money for repairs.
Most owners are responsible and use the money for repairs. But some cash settlements don't include an agreement on how funds need to be spent. To protect your interests, it's good to do extra checks.
Ask to see:
- documentation of damage, eg photos, quotes for repair, insurer's scope of works
- proof of the amount paid, eg receipts from tradespeople
- evidence of repairs, eg code compliance certificate, producer statements from construction professionals.
Search online to check that tradespeople or engineers who worked on the property are licensed and reputable.
What to watch out for: If the seller says repair work has been done but they can't or won't provide proof, it's possible they decided not to use their insurance payment for repairs. This is a warning sign. It means a house might have issues the seller is not aware of, or that haven't been disclosed.
Ask to see:
- damage report or scope of works, setting out how the home was damaged and which repairs or replacements were needed
- repair statements, code compliance certificates, or other documents showing the sign-off of repairs — these show an inspector has checked the repairs and is satisfied.
Check the date on damage reports. Reports issued soon after the damaging event can be overridden by later reports as more investigations are carried out — especially if the damage value goes over the EQC cap.
Any home buyer can ask the seller for documents about repairs from EQC or a private insurer. If these are not available, it's possible the previous owner accepted a cash settlement for the value of damage to the house.
If claims are yet to be settled
If insurance claims for damage to a house you want to buy haven't been settled, talk to a lawyer to find out what this means for you. It could mean repairs haven't been completed and might end up being your responsibility. Ask what rights you will get if any insurance claims are assigned to you.
Selling "as is, where is" generally means repairs are needed and you have no comeback if something goes wrong. The property price should be lower to account for repairs and risk.