New Zealand insurers say a Government decision to offer a buyback option for 5100 residents in the worst affected areas of Christchurch will “provide clarity for customers”.

All the land in greater Christchurch has been split into four zones – red, green, orange and white.

Red marks the worst affected areas, with more than 5100 properties considered unsuitable for construction for at least three to five years.

Construction on buildings can begin in the green zone, while the orange and white zones need further assessments before permission will be given.

Property owners in the red zone will have two options: to sell their homes and land in a package deal to the Government, which will then take over dealings with the insurance company.

Alternatively, they can sell the land to the Government and continue negotiations with their respective insurance companies regarding payouts for the value of the house.

Prime Minister John Key told a press conference on Thursday that the package of options at least gives residents some alternatives to plan for the future and once again feel like they are “in control of their own lives”.

Residents have been given nine months to make their decisions.

Insurance Council of New Zealand CEO Chris Ryan says the proposal gives certainty and choice and recognises insurers’ ability to settle claims in accordance with the terms and conditions of individual contracts.

“The Government has set in place a process as to how individual home and property-owners make their decisions and it will then be over to individuals and their insurers to reach agreement,” he told insuranceNEWS.com.au.

“This will remove the lingering doubt that many have faced in the past weeks and months due to the complexity and difficulty the Government and insurers faced in reaching a workable and affordable solution.”

IAG NZ CEO Jacki Johnson says the Government move is another step in the “journey to recovery for Christchurch”, while Tower NZ MD Rob Flannagan says customers must now make a complex decision.

Vero NZ CEO Gary Dransfield says his company is working to identify customers in the red zone to ensure they have all the information they need.

“Once the Government’s plans are released, we will be ready to help settle those customers’ claims,” he said.