There has been an entire market emerge in Christchurch for houses without insurance cover, labelled "as is where is". But what does this actually mean?
The main reason they're not insured is that, as part of their owners insurance settlement, the insurance cover has been cancelled. Until the house is repaired, insurance companies won't insure it. For some houses, they're just not financially viable to repair, so the houses are purchased and demolished. Easy.
It's the rest of the houses where it gets more complicated.
The first point to understand is that anything can be repaired, even if that means dismantling the house then re-assembling it (which rumour has it was actually done by an insurer as a repair). This is where the houses insurance policies kick in. These policies are contracts, with terms that the insurance company has to be adhere to; just like if you don't adhere to their terms, then they don't cover you (as we often see on Fair Go).
If the cost of the repair is greater than the cost of the rebuild, then the house is classed an economic loss. Some insurance companies will then settle with the owners and cancel their insurance, leaving a house that is repairable, but is classed "as is where is" without insurance cover.
Another reason that the house may be settled and insurance cancelled is that it may not be repairable in terms of the insurance policy conditions. A couple of relevant examples of this is that the house may not be able to be repaired to an "as when new" condition, or may not be able to be repaired with "commonly used construction methods".
This doesn't mean that the houses can't be repaired in accordance with the requirements of the NZ Building Act, just in the terms of the insurance policy - this is an important difference.
The vast majority of the housing stock in Christchurch was damaged in the 2010/2011 earthquakes. The "as is where is" houses are just the most obvious.
So what should you look out for? What would be sensible is that the EQC report for each property should be attached to the property LIM; that way future purchasers know what the damage was as well as the first purchasers. For any house that was built before the earthquakes, you need to make sure that it has been repaired properly; this goes without saying - but how do you know? The most critical area of the house from a NZ Building Act point of view, is safety. This means the structure of the house needs to have been repaired properly, which means a structural engineer should have signed it off. The professionals involved carry liability for their work. If the companies involved have been around for a while before the earthquakes struck, then it's more likely they'll be around afterwards - this will carry some reassurance that the repairs have not been carried out by a "fly-by-nighter".
Not everyone can afford to build a new home, which means that Christchurch's existing housing stock is critical. Know what you're buying and understand what to look for - I'd prefer to buy a properly repaired house that was "as is where is"; than a house that has had its insurer or EQC bandaid over the damage.