A recent High Court decision about discovery issues BC398983 v Zurich Australian Insurance Ltd & anor [2012] NZHC 2333 discusses a claim against Zurich for earthquake damage to the Salisbury Park Apartments. At issue is the indemnity limit for replacement value cover. The insurance policy stated the limit was $12.95M. The body corporate says that the limit is $100M. Its position is supported by the insurance broker ACM who supposedly organised the $100M limit. The limit is an issue because reinstatement may cost about $22M. Zurich says that EQC payments received of $6.8M must be deducted from the sum insured. The body corporate says it recovers the EQC payments additional to the $12.95M sum insured. The judgment does not resolve these issues, but makes orders about disclosure of classes of documents.
Apparently the advisory service floated by the insurance council recently to advise insureds about their claim rights will shortly start. It will be a collaboration of the Council, EQC and insurance companies. I am sceptical about the advice to be given being advice that is in the best interests of the insured. Insureds ought to get unbiased expert advice about their insurance and EQC rights.
Press Release from Westpac
Westpac has broken Christchurch’s insurance deadlock with policies for new construction and full replacement home and contents policies.
The lack of available insurance has left hundreds in limbo and unable to get on with rebuilding their lives after the earthquakes. To overcome that, Westpac and partner, Lumley Insurance, has secured international reinsurance backing. Westpac hopes, by being the first major financial institution in New Zealand to do so, it will help open up the market.
Westpac Managing Director Private, Wealth and Insurance, Simon Power, said customer feedback was the driver in persevering to put the ‘Canterbury New Build Pac’ together.
“We have listened to the frustration and anguish many of our customers have experienced through the lack of available insurance to build a new home and have been determined to find a practical solution,” Mr Power said.
“Now, not only do we hope this helps people move on but it also goes some way to opening up the market.
“Dealing with the issues that have arisen from the earthquakes has required thinking outside the square and what we’ve done here is create an end to end solution so people can get out of no man’s land and get on with their lives with confidence.”
The ‘Canterbury New Build Pac’ combines a Westpac Home Loan, transactional account and Contract works and Home cover and is for new and existing Westpac customers who are ready to start on residential builds or purchase new residential builds in Canterbury, and have all appropriate consents but have not progressed due to being unable to secure insurance cover.
Contract works cover, which is included in the Pac, is for a maximum period of 12 months and includes protection from natural disasters and earthquakes.
Home cover will be on a ‘sum insured’ basis meaning customers insure for full replacement, up to the specified value. Sum insured is common overseas and is expected to become the norm here after the earthquakes changed the country’s risk profile in the reinsurance market.
END
FACT BOX
• Limited availability
• For new and existing Westpac customers
• For new Residential builds only, not for rebuilds
• Special terms, conditions and pricing will apply
• Each application will be individually underwritten and subject to acceptance and approval
More information here:
http://www.westpac.co.nz/insurance/canterbury-new-build-pac/
According to the Judge in charge of the earthquake list, Justice Miller, only 24 claims had been lodged in the High Court since May 2012 and placed on the list. The list is highly managed by the Court and the Court’s goal is to get the cases resolved quicker than ordinary cases. The relatively small number of cases is surprising given the number of insurance disputes that exist subsequent to the earthquakes.
The District Courts in Ashburton, Christchurch, Rangiora and Timaru have adopted a fast track process for dealing with earthquake claims. The time periods for steps have been shortened so that the time periods are now:
1. Notice of claim must be served within 10 working days of filing;
2. Notice of response to be served within 10 working days;
3. Plaintiff’s information capsule to be served within 10 working days;
4. Defendant’s information capsule to be served within 10 working days;
5. Upon the filing of a notice of pursuit of claim the Court shall immediately allocate either a short trial or a settlement conference which shall take place witin 20 working days of allocation.
The intention is that an earthquake claim shall come before a Judge for disposition within 50 working days of filing the notice of claim.
The District Court deals with claims up to $200,000. The Court filing fee is $169.20. Once EQC payments are deducted from claims the nett sum due for many homeowners may be less than $200,000. So insureds should seriously look at bringing claims in the District Court. They will be disposed of quickly and economically. Apparently at the moment very few people have taken advantage of the quick process.
Auckland
PO Box 137243,
Parnell, 1052
Tel: +64 27 434 5489
grant@grantshand.co.nz
