The New Zealand Earthquake Commission (EQC) has asked the country’s High Court to rule on its untested Increased Flooding Vulnerability (IFV) scheme.

Following the Canterbury quakes, some properties are considered at greater risk of flood damage due to changes to surrounding land.

The EQC has been working on determining which properties qualify for the scheme and how much should be paid, and has asked the High Court to intervene with a declaratory judgement.

CEO Ian Simpson says it is the best way to test complex legal questions and give insurers and customers certainty on cover.

“Because it’s untested, there will inevitably be legal challenge at some point so it’s in everyone’s interests to have those matters settled as early as possible,” he says.

The Insurance Council of New Zealand (ICNZ) has been asked to participate in the judgement.

CEO Tim Grafton welcomed the move, saying ICNZ’s involvement will help inform the court of factors not addressed by the EQC.

He told insuranceNEWS.com.au he had some concerns about the IFV scheme because it is based on assumptions, such as whether or not to include the impact of climate change.

“It is about trying to ascertain whether the assumptions they make are reasonable.”

The EQC aims to complete all land damage settlements by the end of this year and will consider whether interim settlements can be made prior to the High Court’s final judgement.