14 May 2014

Insurers seek firm ground on payouts

12:34 am on 14 May 2014

The Insurance Council says asking the High Court to make a ruling on how flood-prone homes should be dealt with, will provide clarity to everyone involved.

The Flockton area has suffered from increased flooding since the earthquakes.

The Flockton area has suffered from increased flooding since the earthquakes. Photo: RNZ / Nicola Grigg

The Earthquake Commission has asked for a High Court ruling on homes and land with increased flooding vulnerability, such as when they're more likely to flood as a result of the Canterbury earthquakes.

The Insurance Council is taking part in the process.

Its chief executive, Tim Grafton, said the declaratory judgment would provide clarity for the council, the Earthquake Commission and landowners.

And the EQC's chief executive, Ian Simpson, said a High Court declaratory judgment was the easiest way to ensure complex legal questions, were tested so that EQC, insurers and their customers had certainty about cover.

He said the ruling will clarify whether EQC was able to settle claims on the basis of long-term loss of land value.

Mr Simpson said increased flooding vulnerability, was a type of land damage that has never been subject to a settlement in New Zealand before.

Because it was untested there would inevitably be legal challenges, so it was in everyone's interests to have disputed matters settled as early as possible.

The legal moves co-incide with NASA scientists warining that part of the West Antarctic ice-sheet appears to be in an irreversible decline which may lead to global sea levels rising as much as five metres.