Esk Valley homeowners and couple Mackenzie Wiig and Michaela Tait say, “we won’t be at all satisfied” about a buyout of their Category 3 home and land until they see the offer.

The young couple simply want to walk away from their flood-stricken property without having a large sum still to pay on their mortgage, and have been anxiously waiting for information on the proposed buyouts for Category 3 properties in Hawke’s Bay.

Wiig said this week’s announcement that the Government and Hawke’s Bay councils had reached an agreement to go 50/50 on the buyouts was promising.

“It gives us something to go off which is great news. It is better than no news, which is all we have had for months.

“But I guess we won’t be at all satisfied until we find out what the actual offer is going to be [and] if it is definitely going to be the full QV [quotable value], or are they going to try to screw us down on that because they have so many people to pay out.”

The pair have house insurance but only received a partial payout due to their home being yellow-stickered and deemed repairable.

Wiig said he was shocked they had not received a full insurance payout from Vero Insurance given they are in a Category 3 zone and cannot live there.

Details of the council and Government buyout deal, which was agreed upon on Thursday, includes topping up homeowners who have only received partial insurance payouts.

Wiig said if they got their updated QV it would mean they could basically walk away “neutral”.

“If they base their figures on that we could at least walk away and start our lives somewhere else,” he said.

“It will pretty much mean we are neutral. We would have gone from having half a million dollars in equity to our name, to no mortgage but absolutely nothing to our name anymore. So we will literally be starting from scratch.”

The deal between the Government and Hawke’s Bay councils - pending community consultation - could see impacted property owners such as Wiig and Tait in talks with their council by mid-to-late September over an offer.

Their property sits about 8km up the Napier-Taupō road close to a creek off the Esk River. On February 14, during Cyclone Gabrielle, it lay in the path of a wave of silt and water between 1.5 and 2 metres high.

“The house was almost salvageable if the land wasn’t such a write-off, the land was just totally destroyed,” Wiig said.

The property sits in provisional flood risk Category 3 along with the rest of Esk Valley which meant they cannot rebuild.

Vero Insurance has told them they will pay $340,000 out of the $560,000 the house was insured with them for because it was yellow-stickered and assessment has deemed it can be repaired for that amount.

Wiig is a self-employed builder and agrees the house could be repaired for the assessed amount, but he said it is a moot point because they are not allowed to repair the house at all under Category 3.

“We aren’t allowed to fix it up so we should be getting the full amount that we were covered for,” he said.

“If our house were red-stickered and structurally damaged, then we likely would have received our full payout of $560,000. We would ironically be better off if our house was more destroyed.”

The couple will only receive $340,000 of their $560,000 worth of cover on their home because it is yellow-stickered, despite not being allowed to repair it or live there. Photo / Warren Buckland

He said the mortgage left to pay on their property was still more than their expected insurance payout.

“At the end of it, we are now left with no house and we are still going to have a couple hundred thousand dollars of mortgage left to pay.”

He said he expects that many others are in similar situations with their own insurance company.

In response to queries from Hawke’s Bay Today, Vero’s head of disaster response David Drillien said in a statement Vero empathised with New Zealanders impacted by the extreme weather this year, but pointed out that land categorisation processes were separate from insurance claims.

“As a responsible insurer, we are trying to get claims paid and money out to impacted customers as quickly as we can to give them options and as much certainty as we can provide,” Drillien said.

“Our claims team is proactively working to identify customers experiencing financial hardship and other vulnerabilities to offer them additional support, and we encourage customers to also make use of the additional non-insurance support that is available (visible on the vero.co.nz website).”

Vero’s head of disaster response David Drillien said he empathised with those affected by extreme weather this year but there was a separation between land categorisations and insurance calculations. Photo / Warren Buckland

He acknowledged customers who were involved in the middle of the process of determining and finalising land categorisation.

“This process, however, is separate from a customer’s insurance claim. The calculation [of] a customer’s insurance claim is based on how much it would cost to repair the physical damage to their property,” he said.

“We encourage customers with questions about the Government buyout process to make contact with their local council.”

Wiig said he and Tait never wanted to return to live at the Esk Valley property even if they could.

“It is just too dangerous, I can see it happening again in the very near future and probably to that extent again.”

James Pocock joined Hawke’s Bay Today in 2021 and writes breaking news and features, with a focus on environment, local government and post-cyclone issues in the region. He has a keen interest in finding the bigger picture in research and making it more accessible to audiences. He lives in Napier.