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Insurance Assignment – Indemnity only


In Xu & anor v IAG New Zealand Ltd [2018] NZCA 149 the Court of Appeal confirmed the High Court decision that under the insurance policy the reinstatement right under the policy was not transferable to a subsequent owner.  It was personal right that could not be assigned.  Because the original insured did not reinstate the house before selling it to the current owner there was no right to reinstatement costs.  Xu received indemnity value only.  The Court of Appeal followed its previous decision in Bryant.  It is now likely that Xu will try to have the Supreme Court consider the issue.  This judgment affects subsequent owners that may have bought a house with an assigned claim expecting to recover reinstatement costs.