New Zealand’s Earthquake Commission (EQC) has started making payments to 4400 homeowners whose properties have been assessed as having increased liquefaction vulnerability (ILV).

The commission says it is too early to estimate the overall payout.

“This cannot be calculated until we are further through the settlements of ILV land damage claims,” EQC Head of Canterbury Land Settlement Keith Land told insuranceNEWS.com.au.

At least two-thirds of the claimants will receive settlements based on the reduction in their properties’ market value.

“This is because, generally, there are no available ground improvement methods to address ILV… on a property where a house has remained in place since the [2010/11] earthquakes,” Mr Land said. “The remaining third of ILV customers are being assessed for a settlement based on the cost to repair the land damage.

“This will generally be in situations where the house has already been, or will be, rebuilt or removed due to the earthquake damage.”

It is the first time such land damage has been recognised as an insured loss.

The 2010/11 Canterbury quakes affected large areas of residential land, making some properties more vulnerable to liquefaction damage from future events.