Is time running out on your earthquake insurance claim?


The 6 year anniversary of the 4 September earthquake is fast approaching and recently there has been commentary in the media about the impact of this on property owners who have not yet settled their insurance claims.


Property owners could be out of time to bring court proceedings if they are not issued before 4 September 2016. In general terms the Limitation Act provides that court proceedings must be brought within 6 years in order to avoid a limitation defence being raised. There have been differing views as to when the 6 year period starts to run in terms of earthquake insurance claims, but the conservative approach would see the 4 September 2010 earthquake as the start date.


The looming deadline has seen some insurers make public announcements as to their position on limitation defences. In particular the Insurance Council of New Zealand announced in December 2015 that its members AA Insurance, FMG, the IAG brands, MAS, Tower and Vero had agreed not to rely on limitation defences for any residential insurance claim relating to the Canterbury earthquakes where proceedings are filed before 4 September 2017.


Southern Response has also announced on its website that it will not rely on a limitation defence for insurance claims arising out of the Canterbury earthquakes for any proceedings filed before 4 September 2018.


So what does this mean if you are a property owner with an unresolved insurance claim?


First, if you are a residential property owner who has an outstanding claim with one of the insurers who has agreed to extend the limitation period then you can take some comfort in the announcements made, however we recommend that you request from your insurer written confirmation of its position on limitation in relation to your claim, rather than relying on public announcements.


If you are insured with a different insurer, are a commercial building owner or have an unresolved business interruption claim, then you may be at risk that any proceedings must be brought before the 6 year anniversary. It may be possible to obtain agreement with your insurer to extend the limitation period but we recommend that you seek legal advice as to your position as soon as possible. 


The EQC has recently updated its position as to limitation and has introduced a policy as to how it will deal with limitation, details of which are on its website. Rather than having an extension to a fixed date, the EQC’s approach depends on when, or whether, the EQC claim has been settled. This does potentially leave homeowners with some uncertainty as to the time frame for any proceedings against EQC to be brought.  Whilst the website does provide some guidance as to the approach EQC will take on limitation, again we would suggest taking legal advice as to your position and options.


Please feel free to contact our Litigation Team for further information or advice on any of the matters referred to in this article.


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Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.