More than 550 claims have been lodged for 'on-sold' houses so far. (File photo of a quake-damaged house)

Hundreds of homeowners who bought houses with earthquake damage have filed for compensation from the Government.

The Earthquake Commission (EQC) has reached a settlement agreement with 50 'on-sold' homeowners since the Crown announced the scheme, expected to cost about $300 million, six months ago.

More than 600 homeowners have applied for the package, with 561 found to qualify.

Those who bought a house between September 4, 2010, and August 15, 2019, and are concerned about their house having unfixed quake damage are eligible for the programme and have until August 14, 202,0 to make a claim.

READ MORE:

* Government to pay for failed repairs to earthquake-hit Canterbury homes

* Buried trouble: Christchurch's next insurance battle over the 'on-solds'

EQC deputy chief executive Renée Walker said the average settlement agreement to date was about $78,000, but this was expected to increase in the future as many of the early settlements were reimbursements to owners who had paid for straightforward repair work.

The claims had been for a mix of reasons, including foundations, re-cladding and drainage.

The scheme was initially set up so homeowners had to agree to a full and final settlement, but it has since changed so contractors can adjust the claim if they find damage they could not see during the initial assessment.

Claimants Reference Group member and insurance advocate Dean Lester said builders were being told by EQC to "price all risk and contingency" on their repair quotes to cover any unforeseen damage, and unneeded work was being included.

He said it was great EQC had found a more practical and effective way to pay costs.

An "on-sold" home is one that was sold after the 2010 and 2011 Canterbury earthquakes and later found to have missed or incorrectly repaired damage that needs to be fixed and exceeds EQC's $100,000 liability cap.

Private insurers argued they were not liable for the damage because the new owners did not have insurance on the house at the time the quakes happened, so the Government stepped in.

It was one of the biggest outstanding insurance issues left over from the earthquakes. Up to 1000 claims are expected to be processed under the scheme.