13 December 2016

Engineers and insurance policies

Members have also recently asked about the status of the MBIE Guidance (‘Repairing and rebuilding houses affected by the Canterbury earthquakes’) and what consideration they should give to the standard of repair set out in insurance policies.

With regard to the MBIE Guidance, MBIE has advised us:

“The MBIE Guidance was issued by MBIE as guidance under Section 175 of the Building Act to assist the people involved in designing, consenting and issuing code compliance certificates in complying with the Building Act and Building Code.  This is clearly stated in the Guidance. The Guidance was developed to provide good practice methods for assessment and repair of earthquake damaged houses, something that had not previously been specifically addressed in the Building Code and supporting documents (Verification Methods and Acceptable Solutions). This is explained in the Guidance, particularly Sections 1.3 and 8.2.

Building Consent Authorities (BCAs) grant building consents if satisfied on reasonable grounds that the building work being undertaken would meet Building Code provisions if completed in accordance with plans and specifications. While the Guidance is not ‘deemed to comply’, it is something which a BCA can have regard to when considering if work will comply with the Building Code pursuant to section 19 (2) (b) of the Building Act. The three Canterbury BCAs all provided endorsement, agreeing that building consent applications following the guidance would be granted a consent. Refer again to Section 1.3. They considered that the collaborative and expert nature of the guidance development and its publication by MBIE provided them with the necessary ‘reasonable grounds’.”

Engineers must be guided by the brief they receive from their client. Clients engage engineers to provide a structural solution that is compliant with the performance expectations of the Building Code. While performance will be “as new”, the question of whether the structural solution meets the wider interpretation of “as new” in the insurance policy will be decided by the loss adjuster or insurer, not the engineer.