NB – It’s bleak out there so cuddle up with a steaming hot chocolate and a freshly made muffin.
As you sit indoors and wonder where our usually wonderful weather has gone, cast your eye around your garden and check on your boundary fences and retaining walls. What condition are they in?
Are you looking to buy a hillside property that might have retaining walls?
Unlike in times gone past, retaining walls are now bit of a nightmare for owners. In times past, retaining walls weren’t really engineered and they weren’t subjected to the forces of nature that now bear down on them.
As Climate Change takes hold (yes, it’s already changed), those old retaining walls are having to hold up heavier and heavier land loadings as the increased rainfall saturates the soils being held back. Additionally, after a good seventy odd years of seismic somnolence, our shaky isles are awake once more and the rocks beneath our feet are increasingly tumbling; and close or distant quakes are stressing poorly designed and engineered walls.
How well placed are those walls, that you are looking at, to hold up to unexpected and extreme events – be it intense rainfall, landslide further up the hill or a shake?
Through changes made in the last few years to private insurance policies, you are not likely to get the complete cover you probably think you have for the walls either – and here is why…
If your retaining wall is damaged in an event covered by EQC, they will be the first agency to assess your walls and the damage to them. If the damage is consistent with the claimed event then they will provide cover – but here is the first disappointment for many unsuspecting owners – the cover is only for ‘present value’ – this means their second hand value – how much they are worth taking into account their age and condition. This is not a replacement cover. This means that the replacement cost may be more than $500,000 (yep – this is not fantasy by any shot, this is just about an expected cost for engineered walls of any substantial size) but the current wall may have only been worth $15,000. That is what you will get paid by EQC.
Next stop will be your private insurer. And this will be your second disappointment if you haven’t thought about your walls hard enough…. If you haven’t specified your retaining walls on your policy, it is very likely that the maximum you will be able to claim from your insurance company will be about $20,000. This includes the amount paid by EQC, so they are only going to pay you a top up of about $5000. BUT there is a disaster excess of $5000 to pay first, so it effectively rules out any private insurer contribution towards your required half a mill wall.
Many of you will have thought about all this, and have appropriate insurance cover in place (complete with the additional premiums required for the cover) but what about your neighbours? They probably own half the wall in question. Your insurance company will only ever pay out for your half of the cost to reinstate.
If your neighbours haven’t done the thinking, or are not willing to pay the extra premiums, your wall is as good as never going to get reinstated. This strong statement is said with high certainty after the shenanigans of the Christchurch experience.
You need to account for this in your thinking around what is an appropriate financial or wellbeing risk for your family when buying that new home.
Get a Quantity Surveyor in to give a quote to rebuild the wall(s) - be prepared for a sharp intake of breath when you get the quote! - and take it around to the other owners so that they also understand the costs involved in getting the wall replaced if something happens to it – being mindful that simple wear and tear may also require the wall to be replaced at some point (an action that wont be covered by insurance).