How do foundation methodologies fulfil the EQC Act with regard to ‘replacement’ and How do these methodologies meet the requirement of my full replacement insurance policy?

How do the foundation methodologies jack and pack, notching of bearers, Smart Lift and epoxy resin or other fill techniques fulfil the EQC Act with regard to ‘replacement’ – “replacing or reinstating the building to a condition substantially the same as but not better or more extensive than its condition when new, modified as necessary to comply with any applicable laws” (quote from the EQC Act)?

How do these methodologies meet the requirement of my full replacement insurance policy? How has it been determined what 'as new' and 'like for like' mean with regard to foundation repair methodology?

Asked: 1 September 2014

Category: Foundations, Insurance

Answers

EQC

3 February 2015

EQC advises:

As the question indicates, EQC must meet the requirements of the Earthquake Commission Act 1993 (EQC Act) when carrying out repairs to houses through the Canterbury Home Repair Programme.
Generally speaking, the “replacement value” standard of repair in the EQC Act requires EQC to reinstate the damaged parts of the house to a “condition substantially the same as but not better or more extensive than its condition when new, modified as necessary to comply with any applicable laws”. This is just one of EQC’s legal obligations when carrying out a repair.
EQC uses repair methodologies designed to achieve the “replacement value” standard and that are recognised as code-compliant approaches to repairing earthquake damage to structural parts of houses. For example, repairing foundation damage using the jack and pack method will comply with the building code and will result in the damaged foundations (including their structural performance) being reinstated substantially the same as they were when the house was new.
Even if the building code requirements that apply to the repair are stricter than when the house was new, EQC must still carry out a repair that is compliant with the building code. This applies even where it means that the damaged foundation structure needs to be improved, compared to how it was when new.
EQC’s repair strategy depends on facts specific to each house, including the nature and extent of the damage caused by the earthquakes. The circumstances of the damage, changes in building materials, or new building code requirements, may mean that it is not reasonable or not possible for EQC to reinstate the structural parts of the building to exactly the way they were when new.  The “replacement value” standard is met because the damaged parts of the house (including its structural performance) are reinstated to substantially the same as the building when new.  This is even although the foundations may not be identical to the way they were before the earthquake damage.
Where EQC is repairing and circumstances do not permit an exact or complete repair in all respects to the condition when new, EQC will carry out a repair that is feasible and sufficient to repair the earthquake damage. The legal obligation that sets that standard is found in Schedule 3 of the Earthquake Commission Act 1993, under clause 9(1).http://www.legislation.govt.nz/act/public/1993/0084/latest/DLM307146.html
For more details on EQC’s obligations when carrying out a repair, seehttp://www.eqc.govt.nz/news/eqcs-approach-to-repairing-houses.

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IAG

11 December 2014

IAG advises:

Any new building work is required by the building act to comply with the building code. This means if you were having a replacement foundation (a new foundation) then the entire foundation must meet the current building code and provide a durability of 50 years.
In the case of repairing a foundation, only the repaired part of the foundation is required to meet the building code (under the building act). What remains does not need to be upgraded. This means the repaired foundation will be returned to it’s pre-quake state and in many cases is enhanced and the foundation will perform no worse in future events. Customers, if they choose, can upgrade the remaining foundation at their own cost during their reinstatement if they wish.
IAG’s interpretation or position on the wording ‘as new’ is that the home should be returned to the same quality, purpose, functionality and aesthetic as when it was new (meaning when it was built), not that the home has to be built from scratch. The implication that a new home needs to be built is incorrect.

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Lumley

11 February 2015

Lumley advises:

Any new building work is required by the building act to comply with the building code. This means if you were having a replacement foundation (a new foundation) then the entire foundation must meet the current building code and provide a durability of 50 years.
In the case of repairing a foundation, only the repaired part of the foundation is required to meet the building code (under the building act). What remains does not need to be upgraded as it has not been damaged as a result of an earthquake. This means the repaired foundation will be returned to its pre-quake state and in many cases is enhanced.
The relevant policy standard in Lumley’s policy wording is "substantially the same condition and extent as when it was new".
In determining what work is required to reinstate a property to "substantially the same condition and extent as when it was new", Lumley relies on the recommendations made by its expert advisors, including structural engineers, geotechnical engineers, surveyors and licenced building practitioners.
Lumley and its experts also refer to the MBIE Guidelines, which reflect the most up-to-date scientific and geotechnical information and knowledge about the impact of earthquakes and the effects of liquefaction on residential dwellings, and are widely considered to be the guiding document on legal requirements and best practice for house repairs and reconstruction in Canterbury.

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Southern Response

4 December 2014

Southern Response advises:

Southern Response has filed an explanatory video, along with key points, which can be found here:  http://southernresponse.co.nz/images/documents/asnewdefinition.pdf

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Tower

20 October 2014

Tower advises:

Any foundation repair must necessarily meet the same safety and durability standards as that of a new build. With regard to any visible elements of a foundation, such as a concrete perimeter ring foundation, size, functionality, relative quality and reasonably addressing the re-creation of character and appearance are adhered to.

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