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Feb 2012- Partial “No-Rebuild” Talk by CERA Shows Conflicted Policy Thinking

Christchurch, New Zealand – In its latest briefing the Canterbury Earthquake Recovery Authority again demonstrated conflicted policy thinking. It said it would rule out land repair in some red-zoned areas, while leaving open possibilities of remediation in other parts.

In making decisions such as land remediation Cera appears to have stepped over the bounds of a government agency and into the role of an insurance company and a land owner.

Is Cera acting as: (1) an independent government agency that is concerned about the physical safety of residents by making decisions on land zoning and land remediation, or as (2) an extension of the state-owned insurance company EQC by making such decisions for the economic interests of EQC?

The ‘partial no-rebuild’ talk by Cera clearly shows it is not solely concerned about safety. It admits that all land can be remediated at time and cost. Time and cost, are the concerns of the land owner and the insurers, including EQC.

If Cera is acting as an independent government agency, why does it not allow red-zoned homeowners to take their insurance money and then pay them market price to buy these red-zoned homes? Why the insistence on surrendering insurance policies to the crown?

It seems Cera is sending mixed messages.

On the one hand Cera tells residents to weigh their decisions based on insurance payout comparisons, and most importantly, not to make a rush decision.

On the other hand Cera would like people to believe its current buy-out offers are the best option. The language in the offers mildly threatens residents with lower prices for their red-zoned homes should they give the offer a pass.

What’s missing in this first part is that Cera omitted telling residents that they are also legally entitled to receive a land damage assessment from the other insurer, EQC, before making any decision.

EQC is obligated to provide assessments on land damage to a policy holder, but for many residents this has not happened.

Any homeowner who signed the Cera buy-out offer without first having an EQC land damage dollar value assessment made a blind decision and may be said to have made their decision to sell under duress, which would invalidate the sale.