The BIG one: The earthquake that struck the Canterbury region on 4 September 2010 resulted in the largest claim ever made on Civic Assurance or its predecessors
The Christchurch Earthquake
Centred 40 kilometres west of the city of Christchurch near the town of Darfield and at a depth of 10 kilometres, the magnitude 7.1 earthquake at 4:35 am on 4 September 2010 resulted in extensive damage throughout the Canterbury Region and as far away as Timaru. The earthquake by a substantial margin caused more property damage than any other event in the country’s history. The death toll predicted for an earthquake of this size according to GNS Science was 75. Fortunately there were no deaths and that is thanks to good adherence to the building codes, the early hour of the earthquake, and undoubtedly a measure of good luck.
The damage was the result of three earthquakes just seconds apart that caused a 25 kilometre fracture across the Canterbury Plains and unleashed energy equivalent to 670,000 tonnes of explosive. The shaking lasted 40 seconds and moved parts of the land 4.5 metres horizontally and up to 1.5 metres vertically.
Geologists have subsequently discovered a new fault trace, known as the Greendale
Fault, 22 kilometres long, running from Greendale towards Rolleston. It is believed
that it has been at least 16,000 years since this ‘blind thrust fault’, which had
been accumulating stress for thousands of years, last ruptured. Scientists are also
investigating what has beencalled a foreshock of magnitude 5.8 just five seconds
before the main shake. This foreshock reportedly woke a number of sleeping Cantabrians,
giving them some notice of the ‘big one’.
There were three distinct pulses of energy around the time of the main earthquake.
The foreshock was followed by two shakes which became entangled, making it difficult
initially to pinpoint the size (initially stated as magnitude 7.4), location, and
depth of the main shock.
One of the more visible effects of the earthquake was soil liquefaction which caused
many small ‘sand volcanoes’, which are mounds of sand ejected to the surface, resulting
in much damage to homes, roads and pipe infrastructure. The liquefaction shook sandy
soil violently causing water to rise through its pores. Scientists compared it to
jumping on wet sand at the beach - it soon turns to a murky soup. Liquefaction requires
shaking on the Modified Mercalli Intensity scale of 7.0 or more.
Scientists from the University of Auckland Geology Department said the Canterbury earthquake was one of the most significant cases of liquefaction in New Zealand history. They said the process could affect any town or city near a river, estuary or coastline. Large sections of Christchurch and Kaiapoi were built on soft sediments that remained saturated after a wet winter. The good news since the earthquake is that there has been little rain, which has allowed time to repair the damaged stopbanks.
As many as 9 out of 10 homes in the flat part of the city have been damaged by the
quicksand-like effect. Much of this damage was superficial rather than structural,
but in Bexley, a five-year-old subdivision near New Brighton, at least 100 new homes
were left uninhabitable after silt, sewage and grey sludge cracked the road and
squeezed through floorboards.
The worst-affected areas were coastal spots such as New Brighton and the suburbs
that skirt the lower reaches of the Avon and Heathcote Rivers. Some homes in Kaiapoi
near the Waimakariri River have partially sunk because of the liquefaction and lateral
The total damage from the earthquake is estimated to be between $4 billion and $5 billion.
Civic and LAPP’s Response
At the time of the earthquake, Civic Assurance insured the above ground assets for Christchurch City Council, Environment Canterbury, Waimakariri District Council and Timaru District Council. In addition, Christchurch City Council and Waimakariri District Council were members of the Local Authority Protection Programme (LAPP Fund), a mutual fund managed by Civic Assurance. LAPP was, designed to cover assets considered difficult and/or expensive to insure such as below ground infrastructure, river control systems and flood protection schemes.
Damage sustained to Timaru District Council and Environment Canterbury’s assets was minor. There was significant damage to Environment Canterbury’s network of stopbanks and river control assets, but these were uninsured. Civic and LAPP’s focus was therefore on the very significant damage to the assets of Christchurch City Council and Waimakariri District Council.
The earthquake caused significant damage to older buildings in the Christchurch central business district and to buildings, land and infrastructural assets elsewhere in the city and in the Waimakariri District. Damage was sustained to council buildings, community centres, sporting facilities, heritage buildings, wharfstructures, residential housing, building contents and a considerable amount of reticulation infrastructure.
Damage was worse in areas of high liquefaction and lateral spreading. The most damaged of all council owned assets was underground wastewater systems. Significant damage also occurred to above ground pump stations. The formation of ‘sand volcanoes’ and large areas of mud and sand caused disposal problems for property owners and council staff.
Civic appointed the international adjusting firm Cunningham Lindsey on the day the earthquake happened to handle the assessment of all Civic and LAPP Fund losses. Cunningham Lindsey established a response centre in the conference area of a central Christchurch hotel and brought in assessing personnel from around New Zealand and overseas. In the week following Civic also appointed engineers from Manawatu District Council, Palmerston North City Council and Horowhenua District Council to assist with the assessment of damage to underground reticulation systems.
To oversee the process and to assist the Councils with supplying the information needed to properly assess damage, Civic very quickly employed a recently retired former General Manager of Civic to be based in Christchurch. His role was to ensure the requirements of Civic and LAPP’s reinsurers would be met, as without their support there would not be enough money to pay the councils’ claims. Structural engineers and specialists in the restoration of heritage buildings were also engaged.
Project Control Groups were established at both local authorities comprising council engineers, departmental heads, finance personnel, assessors and insurer representatives. These Groups meet weekly to review progress and work through assessment issues.
Waimakariri District Council Claim
The Waimakariri District is located 20 minutes drive from Christchurch, north of the Waimakariri River. The district occupies about 225,000 hectares from the beaches of Pegasus Bay in the east to the Puketeraki Ranges in the west and includes the towns of Kaiapoi and Rangiora. The estimated district population is currently around 45,000.
Most of the damage in the district was sustained in Kaiapoi and the neighbouring
seaside settlements of Pines Beach and Kairaki Beach. Only one major council building
was damaged in the main town of Rangiora. In Kaiapoi, the Aquatic Centre, Memorial
Hall, Kaiapoi Wharf and buildings, Hansen’s Mall and Bridge Tavern, the library
and offices, and the Court House were the worst hit. Although ductile pipes largely
withstood movement, brittle asbestos cement and concrete pipes were seriously affected
and the deep gravity fed sewer reticulation system was severely damaged in many
At Pines Beach and Kairaki Beach, areas of high liquefaction, there was serious disruption to water and wastewater services. In some parts of the settlements, temporary services were still in place three months after the earthquake. At Kairaki Beach, the sewer pump station lifted out of the ground and there was extensive use of portable toilets in all areas.
Loss of revenue and loss of rents claims will also eventuate and the total claim on LAPP and Civic from Waimakariri District Council is expected to be of the order of $25 million.
Christchurch City Council Claim
Christchurch City Council is New Zealand’s second largest city and the second largest
The earthquake caused widespread damage. The mix of damaged assets was similar to Waimakariri District, but the scale of damage was much greater. In addition, there was significant damage to heritage buildings, residential units, the Bromley Sewage Treatment Plant, pump stations and wells.
The city’s infrastructure coped well because of good engineering standards and much of the underground services came through intact. Lessons drawn from the 1994 Northridge California earthquake and the 1995 Kobe earthquake had helped. For example, bridges carrying electricity cables had received additional strengthening.
Underground wastewater infrastructure experienced most damage. Infiltration of sand and silt into damaged reticulation pipes caused by the liquefaction created difficulties in detecting damage and restoring services. Some 2700 homes were without sewer connections and operated with temporary systems or portable toilets. As in Waimakariri District, ductile pipes largely withstood movement but brittle asbestos cement and concrete pipes suffered serious damage where there was lateral spreading and/or liquefaction.
The worst damage was in the oxbow loops around rivers where the roads and underground services are surrounded by water on three sides. Lateral spreading caused jellified ground to slump towards the lower lying waterways. The suburban riverside areas of Avonside, Dallington, Burwood and Avondale and the river delta areas near Brooklands, Bexley and Spencerville were the most affected.
Liquefaction not only broke pipework, but shifted levels up and down. This is a serious problem for gravity-fed wastewater systems, which rely on even grading. In places the sewerage system has moved noticeably towards the surface because sealed air-filled structures will float upwards when the ground around them turns to watery jelly. Not surprisingly, in areas where serious damage to wastewater reticulation has occurred, there are likely to be issues with the water and storm water systems as well. However, water pipes under pressure contain little air, so are denser than sealed wastewater pipes and less likely to move if the surrounding ground liquefies. Concrete stormwater pipes normally do contain a lot of air, but their larger size and weight makes them more resilient to movement.
The Bromley Waste Water Treatment Plant has relatively minor damage to buildings and plant but significant damage to oxidation pond bunds (the dikes between the oxidation ponds), which have experienced severe cracking and lateral slumping. Restoration will necessitate re-engineering of the bunds and stabilisation of the ground under them. The restoration of the land is not an issue for insurers.
Over 80 Christchurch City Council pump stations have been severely damaged. Some of the pump station buildings such as Palmers Road were so badly affected that it was more than two months before entry to the buildings was deemed safe enough to enable assessment of the internal plant. Several smaller stations have been forced completely out of the ground and all the connecting pipes shattered. The damage to pump stations initially necessitated the pumping of waste using portable pumps directly into rivers and other waterways. Temporary lines in affected areas were established so this practice has now ceased.
Some fresh water wells have been damaged and over 170 will be checked for breaks and cracking using closed circuit television analysis (CCTV). Remediation is difficult and serious damage has necessitated capping of some of the wells and re-drilling on alternative sites.
The worst affected of the Council owned heritage buildings was Godley House at Diamond Harbour on Banks Peninsula, a Grade 2 New Zealand Historic Places Trust listed building built in 1880 as a home for Harvey Hawkins, one of Lyttelton’s leading citizens. At the time of writing it is not known whether this historic home can be saved.
Two other damaged heritage structures are the iconic gothic revival Canterbury Provincial Council Buildings, built between 1858 and 1865, which is the only purpose built provincial government building still in existence in New Zealand, and 'Our City', a Queen Ann style building dating from 1887, built as Christchurch City Council's original council chambers and now an arts and recreation centre.
As the second largest provider of residential housing in New Zealand, Christchurch City Council owns around 2,600 housing units. Many of these were significantly damaged and more than 60 will need to be completely demolished. This necessitated the re-housing of hundreds of tenants and many agencies assisted both in support and in locating temporary accommodation for displaced residents.
Claims for damage to sporting facilities and building contents are also being assessed and, as in Waimakariri, a significant Business Interruption claim will result. The total claim for Christchurch City Council on LAPP and Civic will be of the order of $150 million.
The most immediate problem after the earthquake was the clearing of silt blockages which resulted from ground liquefaction: where pipe joints had broken, the weight of the ground above can force mud through the gaps. To clear the system, water blasting was required.
The only practical means of detecting damage was with the use of closed circuit television (CCTV) cameras. Teams of contractors have been putting cameras down sewers in affected areas to get a complete picture of the damage underground. For Christchurch City Council, it is thought that around 10% of its wastewater pipes from a total of 1790 kilometres has been damaged. In a normal year, Council would budget for about 4 kilometres, which gives scale to the size of the exercise.
LAPP has appointed a specialist engineer to work with Council staff in analysing CCTV footage on a street by street basis, plotting and mapping each break using GIS technology. Decisions are then being made, depending on the number of breaks in each length of pipe, on whether to repair or replace. Lateral pipes from the main network which service individual households are also being looked at (in part because broken sewage pipes can admit high levels of unwanted storm water). This process can create problems from a cost allocation point of view as part of each lateral asset is owned by Council and part is the responsibility of the homeowner.
Damage to above ground assets where the damage is visible has generally proved much easier to assess and quantify than LAPP Fund losses for below ground reticulation. That said, some aspects of damage to above ground assets have needed specialist advice and input. Currently there are over 650 assets on the Building Damage Schedule just for Christchurch City Council and damage is still being reported. It goes without saying that claims for residential housing and heritage buildings should be treated sympathetically.
In New Zealand, the Earthquake Commission (EQC) provides the first $100,000 of coverage for insured residential buildings and the first $20,000 for contents. The balance up to replacement value is contributed by commercial insurers. Claims to the EQC exceed 150,000 in number and have, of necessity, been prioritised. EQC adjusters must assess damage at each site before commercial insurers can become involved. The assessment process will be long and some householders may have lengthy waits before remedial work can commence. As suppliers of residential housing, both Waimakariri and Christchurch have a social obligation to arrange alternative accommodation for displaced tenants.
Approximately 10% of Christchurch City Council’s housing stock was severely damaged to the extent that hundreds of tenants, many elderly or with special needs, had to be re-located while repairs were undertaken or alternative arrangements made. Recognising this, EQC have assigned dedicated assessors to work with council staff to speed up the process.
As affected homeowners have been learning, sewer systems in both areas rely on gravity. With much of the land being so flat, most of Kaiapoi and Christchurch City are served by a series of invisible underground ramps to create the necessary falls. There are minimum gradients required for this to work. The pipes in the upper part of the catchment are laid at a shallow depth of around 1.5 metres deep, but as they move down the catchment the pipes can end up being in trenches as deep as 6 metres.
The biggest claim cost to Civic/LAPP, and the most problematic from the point of view of detecting and assessing damage in both the Waimakariri District and Christchurch City catchments will be the restoration of the underground network of pipes which provide the three essential services of water, sewage and stormwater. By far the most expensive and problematic of these will be the repair of wastewater (sewage) reticulation systems.
Inevitably, restoration of Councils’ services cannot be done overnight and will
involve a lot of noise, dust and dug-up roads. It is also difficult work as laying
pipe in deep trenches is a skilled process because the falls have to be precise.
In order to access the damaged area, sheet iron piling is first needed to reinforce
the excavation and hold back waterlogged soil and the groundwater has to be pumped
out at the right rate so as not to cause subsidence.
In areas that have experienced high liquefaction, the replacement of the deep gravity sewer networks may not be the most practical or economic solution and work is currently being undertaken to investigate alternatives such as pressure or suction systems, which operate at a more shallow depth and are easier to repair or replace.
Heritage buildings have proved a special challenge for assessment teams. Public interest in many of Canterbury’s and New Zealand’s iconic buildings and the requirements of local by-laws and the New Zealand Historic Places Trust to reinstate ‘sympathetically’ have meant that specialist advice and knowledge needed to be involved. Civic has appointed one of the country’s leading experts in the restoration of historic buildings who is working with heritage architects to agree the scope of works and the restoration process for each of the 60 buildings that have currently been assigned to him.
In Christchurch, contractors have now been appointed to take day to day charge of the infrastructural rebuilding work in different parts of the city. Each area is to be known as a Pod with the head contractor in each being responsible for the restoration of all services and for communicating progress to local residents. It is hoped all will be operational by the end of 2010. Inevitably with damage of this magnitude, work in each Pod will be prioritised.
Some permanent infrastructural reinstatement work, particularly in the Christchurch areas of Avonside and Burwood, will be delayed in order to stabilize and remediate liquefied ground and make it fit for rebuilding. The Earthquake Commission is planning to build a permanent retaining wall by sinking a line of piles along the Avon River bank, probably in the form of stone-filled columns. This is designed to stop land slumping towards the river. Until that work has been completed, permanent repairs in those areas will not be undertaken and residents will continue to live with temporary solutions.
Because of the lesser scale of damage in the Waimakariri District, repairs are likely to be effected more quickly that in Christchurch City. For both Councils however it is considered that the assessment and restoration process of all the damaged infrastructure, buildings and services will extend beyond two years.
This has been an incredibly difficult time for the two councils most affected: Waimakariri
District and Christchurch City. They and their staff are to be congratulated on
the amazing job they have been doing for their communities.
The claim from Christchurch City Council from this earthquake to Civic/LAPP is thought to be bigger than any single insurance claim ever paid by a New Zealand insurance company to any single policyholder. It has reinforced the value of having adequate insurance and proved in the most convincing way possible the value of Civic Assurance and the LAPP Disaster Fund.