Christchurch owners in areas of risk of rockfall are being treated differently depending on which insurer is involved. I am aware that IAG and Southern Response are paying out full rebuild costs to owners of properties “red zoned” and with s124 notices by reason of rockfall risk. Tower Insurance and Lumley General Insurance are currently only wanting to pay a theoretical repair cost. Hopefully the High Court will shortly alter the position of Tower Insurance and Lumley General Insurance.
The decision in Murray v State Farm Fire and Casualty Company 509 S.E 2d 1 (1998) 203 W.Va 477 assists the homeowners. It involved two homes being damaged by rockfall and one home that suffered no damage. All homes were at risk of future rockfall damage. The house occupiers were required to vacate their homes. The insurance companies argued that the plaintiffs could not recover for the total loss of their homes due to the potential for future rockfall, but only for physical damage suffered. The Supreme Court of Appeals of West Virginia disagreed with the insurance companies. It decided that all houses were damaged and the homeowners suffered a total loss because the houses were completely useless and uninhabitable.
