Red zone insurance case in High Court

7:29 pm on 10 December 2012

A Christchurch lawyer has confirmed a High Court case brought against an insurance company relating to a red zone property will be the first of its kind.

The home of Matt and Valerie O'Loughlin in Dallington was seriously damaged in the February 2011 earthquake.

Tower has agreed to pay for the repair of the property.

But because the home is in a red zone area, which owners have to vacate by April next year, Mr and Mrs O'Laughlin argue they should be paid the replacement cost.

Lawyer Grant Shand said the High Court action is a 'test case' because it will be the first time a court will determine what an insurance company must settle.

Head of World Claim, an international insurance claim adjuster, Andy Fusco says it took Tower a long time to understand the house was uninhabitable.

He says when the ground beneath a house can not be built on, the building becomes a constructive total loss.

Mr Fusco says it took nine approaches in two months to get Tower to the table.