A Word of Warning From Christchurch Quantity Surveyor

"I’m seriously concerned" says Christchurch Quantity Surveyor Victoria Whitta following last week's news that insurer IAG is cash settling claims to meet deadlines.

Whitta says in her extensive experience working with clients on cash settlements, every scope of damage that she has peer reviewed has shown higher repair costs compared to those presented by the insurance company or EQC.

"Our costings are based on up to date market information, robust systems and correct processes," she says, "and Red QS is really concerned that the disparities we have seen in virtually every claim we have peer reviewed, are likely to continue and in one big hit."

Whitta says there shouldn't be a single home owner who doesn't have a peer review completed by a qualified Quantity Surveyor before accepting an offer, but people just don't know this and after 4 years, are over it.

Ms Whitta also says there are potentially major risks to the quality of the housing stock in Christchurch if people are cash settled en masse.

"People taking less than their entitlement could have a serious knock on effect regarding housing stock with sub standard repairs being completed because home owners simply don’t have the money to complete them properly," she says.

The CHRP programme was established to manage repairs for people as this is not something many of us know how to undertake. The programme also ensured that houses were repaired with the money provided for that reason.  

Many of the claims at this stage are big and complex which will also make things difficult for homeowners to manage repairs and be confident of correct costings.

Few over cap repairs completed to date under the scheme have not included variations to the original cost, which is another consideration when accepting a cash settlement that these unknowns be accounted for as best they can. Once a discharge has been signed acknowledging a full and complete settlement, there may be no recourse for variations once the repairs begin.

Whitta says builders agreed to work for lower rates under the CHRP as the work was guaranteed but she knows many have said that if a home owner comes to them directly, they won't be able to do the work for below market value rates.

"Add to this inflation costs, which are sitting at around 10-12% a year, and I predict we are going to have a huge problem if this mass cash settlement occurs because people won't know the real costs of what they need to properly repair damage," says Victoria Whitta.