Vero Insurance New Zealand recently won a court case described by one global legal firm as “a line in the sand on the obligation to prove what is the appropriate repair strategy for natural disaster damage.” The disputed insurance claim concerned two Christchurch commercial buildings damaged 13 years ago by the Canterbury earthquakes.
Vero, owned by Suncorp Group, has a significant market presence in New Zealand as a provider of insurance coverages via brokers.
The Court of Appeal upheld an earlier decision by the High Court and dismissed the appeal by the owners of Moorhouse Commercial Park (Moorhouse). Moorhouse unsuccessfully argued that Vero breached its contract under Moorhouse’s insurance policy including failing to accept the extent of the earthquake damage.
Moorhouse also argued that Vero’s “epoxy repair” methodology would not repair the buildings to the policy standard.
According to a report by global law firm Dentons, “the case underscores that the insured holds the usual burden of proof in insurance disputes, particularly if they allege that there is more extensive damage to a property or whether a particular repair strategy proposed by the insurer meets the policy standard.”
The case – 13 years in the making - also underscores how drawn out disputes over earthquake-related repair issues can be when they become a court battle.
However, this dispute area is starting to grow.
“Another difference is our accident compensation scheme that provides no-fault cover to everyone in New Zealand and eliminates litigation for personal injury,” said Burkhart.
The Denton’s report on the Vero court case said it “settled the law” on a “greatest hits” of earthquake-related issues including confirming the use of epoxy injection to repair concrete cracking and whether an inaccessible but damaged wall requires cosmetic finishing.
Reports suggest there are still many 100s of unsettled Canterbury earthquake insurance claims, some are likely involved in ongoing court battles. Others could still go to court.
“I am an expert working here in Canterbury and have clients that owned the property at the time of the earthquakes who are still dealing with their insurer,” said Adrian Cowie, director of Topografo, a surveying and civil engineering consultancy.
The Canterbury Earthquake Sequence (CES) was New Zealand’s most costly natural catastrophe. The event resulted in 650,000 insurance claims and a total insured cost of more than $31 billion.
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