Engineers and natural disaster claims

What’s your role as an engineer?

You may be engaged by both insurers and homeowners to assess how a property has been damaged by a natural disaster; and how that damage can be reinstated to the standard required by the insurance policy.

• You are being asked to advise on an insurance response. But the response also must meet the Building Code to the extent required by the Building Act, and this will be set out in your engagement.
• You are being asked to provide information to help the parties (not just your client) come to a fair and just resolution of the insurance claim, based on how they interpret the required standard.

Your role is to do this independently and objectively, guided by the questions you have been asked in the letter of engagement. You must act without bias. You are not an advocate for your client. Your role is to give your client technically accurate advice, regardless of whether that advice aligns with your client’s interests or opinion.

Lessons learnt from the Christchurch Earthquakes

In 2023, Engineering New Zealand developed legacy documentation to capture lessons learnt from the work of the Engineering New Zealand Expert Panel in helping to resolve insurance claims related to the Canterbury Earthquake Sequence. These were developed with input from the Panel and the Engineering Advisory Group, and in consultation with stakeholder representatives from the Homeowners Advisory Group, private insurers, Toka Tū Ake EQC, NZCRS and lawyers.

There were 9 documents developed in total, the following documents are of relevance to engineers working in the area of natural disaster insurance claims:

The Canterbury Earthquakes Engineering Journey

A summary of the key engineering lessons, themes and experiences in the residential recovery following the Canterbury Earthquake Sequence

Panel Legacy Document – Engineering Journey

Guidance for Engineers on residential damage assessment and reinstatement

Practical advice and key considerations for engineers undertaking an engineering assessment of residential buildings damaged by natural disasters

Panel Legacy Document – Guidance for Engineers on residential damage assessment and reinstatement

Guidance for Engineers on Insurance Law

A summary of key legal and insurance considerations from the Canterbury Earthquake Sequence, including a summary of case law relevant to engineers working in the area of natural disaster damage assessment and repair.

Panel Legacy Document – Guidance for Engineers on Insurance Law

Engineering New Zealand’s Panel Member Instruction Letter and Brief

A summary of the referral services provided by the Panel, including the instruction and brief for each service. Documentation presented is representative of NZCRS referrals only, with an exception for the facilitation service, as there are significant differences between NZCRS and Tribunal facilitation service. Example reports are given for each service from past GCCRS engagements.

Panel Legacy Document – Panel Instruction and Brief

Reference Library

Key technical documents relevant to engineering assessments

Panel Legacy Document – Reference Library

Engineering Engagements

Before you start, make sure you have a clear letter of engagement so everyone’s expectations are clear. This should include a brief on the reinstatement standard as set out in the insurance policy.

We recommend you use one of Engineering New Zealand’s letter of engagement templates. The definitions of required standard in the letter of engagement can be tailored to the particular requirements of the insurance policy, but it is important that the letter of engagement is really clear about the standard you are being asked to report to.

Post-earthquake assessments

This template was developed for use after the Canterbury Earthquake Sequence, in consultation with insurers and homeowners. It gives you a framework for engaging an engineer to assess and report on earthquake damage and reinstatement, with different options for the reinstatement standard. It remains relevant for use after all earthquakes

Structural assessments after all other natural disasters

This template has been developed in 2023 by Engineering New Zealand for use after all non-earthquake natural disasters. It's still subject to review by insurer and homeowner representatives and may be amended as a result.

Geotechnical assessments after all natural disasters

This template has been developed in 2023 by Engineering New Zealand for use after all natural disasters. It's still subject to review by insurer and homeowner representatives and may be amended as a result.

Geotechnical assessments after the Auckland flood events

These templates have been developed in August 2023 by Auckland Council for use when engaging an engineer to assess and report on flood damage and reinstatement after the Auckland flood events.

Gather information

Once you are engaged, you’ll need to gather information to help you answer the questions in your letter of engagement.

The first question is whether there has been natural disaster damage. To answer this, you need to form a view about what the property was like before the natural disaster.

Homeowners have a unique and valid perspective on damage to their property. Whether you are engaged by the homeowner or the insurer, we encourage you to discuss the property’s condition with the homeowner. Ask them how the property changed through the earthquakes and any action taken to reinstate the damage since then. Also ask them for any records or photos they have that will help with your assessment.

Other useful information can include:

• The Council’s property file
• Other engineering, surveying or other assessments carried out on the property
• Other reports relating to the property, including previous work to reinstate damage
• Aerial photographs of land damage and liquefaction
• Peak ground accelerations from the area (available from the NZ Geotechnical database)
• Sub-floor void CCTV footage
• The original EQC scope of works

If you think there is a gap in the information available to you, you should let your client know as soon as possible.

You’ll also gather information during a site visit. If you are the Chartered Professional Engineer, Chartered Member or senior engineer signing off on the assessment report, then you should be part of the site visit team.

At the site visit, make sure you introduce yourself to the homeowner and let them know your registrations/affiliations. Explain what you’ll be doing at the site visit and why. For example, if you are creating a damage mark-up of the property, how you will go about doing this.

Be thorough in your site visit and evidence gathering. Many of these outstanding claims are particularly complex. It is easier for the homeowner if you do one thorough assessment than coming back multiple times. How you engage with the homeowner during this visit can affect how they’ll view your report, as well as their trust in you and the profession generally.

Being thorough means:

• Thinking about what you might need to assess before you go. If you know you will need to lift carpet, then arrange to take a carpet layer with you.
• Assessing the house as a whole. Don’t just assess part of the house and extrapolate from there. Consider what you see against what you know about how the house shook in the earthquakes, where it is located, what the ground performance was, whether there was liquefaction, what material type the house is, and the roof type etc. Looking at all the data helps you to assess whether damage is likely to have been caused by the earthquakes.
• Looking at changes in non-structural features that can tell you about structural changes. For example, measuring bench-tops, window sills, weatherboards, and hinge sets on doors can provide indicators of pre-existing conditions that may not be a result of earthquake damage.

Assess the information

Once you’ve gathered information, you need to assess it to answer the questions in your letter of engagement.

There are a number of tools you can use to help assess the information. The MBIE Guidance contains criteria and information that can help engineers to work through earthquake damage and repairs. But your reference point for any reinstatement recommendations is the required standard in the insurance policy.

The MBIE Guidance doesn’t define what damage is in insurance contract terms, and it still requires the application of engineering judgement to how criteria are applied and reinstatement options selected.

Write your report

The Engineering New Zealand report framework includes recommended subheadings for your report, and is included as an Appendix in the Letter of Engagement templates. It makes sure reports are set out in a consistent way, which makes it easier for homeowners and insurers to compare different reports.

While you should not rely exclusively on the homeowner’s observations, they should be reflected in your report. If you disagree or agree with the homeowner’s view, you should explain why and cite evidence.

Write your report so that a reader unfamiliar with the property could get a clear understanding of its history, damage you observed, and how you recommend it can be reinstated to meet the policy standard. If you disagree with other engineering reports, you should say why.

You must include reasons and evidence to support your findings and conclusions. Don’t assume something if you could easily investigate it. If you are making assumptions, make it clear what assumptions you are making and why. Say if you think further investigations are required.

Communicating your opinion

How you communicate your opinion is really important. Your credibility is about more than technical proficiency. It’s also about the journey you take your client on, and how you interact with them. Don’t simply send your engineering report to your client by email. Contact your client and talk them through what your report includes. Ask them if they have any questions. Use plain English to explain technical points.

What happens when you have a different opinion from another engineer?

This forensic type of engineering assessment is not straightforward. Engineers need to look at a property post-disaster and make assumptions about what it was like before and how it’s changed. This requires professional judgement, and sometimes engineers can reasonably disagree.

If you come to a conclusion that’s different from another engineer’s, don’t immediately assume one is right and one is wrong. To help your client move forward with their claim, discuss with the other engineer in a professional and respectful way how your reports differ and why. Be prepared to listen to the other engineers’ point of view. Ask some key questions. Were you working to the same brief? Did you both look at the same information? What differences might you have found in your site visits?

If this doesn’t help, talk to your client about approaching the NZCRS for advice on next steps, including whether our facilitation service might be an option.

See our facilitation service