27 Aug 2014

Insurer must pay for multiple quakes

5:55 pm on 27 August 2014

The Supreme Court has ruled that an insurance company must pay out for damage to a Christchurch building from multiple earthquakes - not just the final quake that left a property unable to be repaired.

The case was brought by Ridgecrest NZ Limited, which had a building in central Christchurch that was insured for loss or damage of up to $1,984,000 for each claim.

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Building repairs continue in post-quake Christchurch. Photo: RNZ / Karen Brown

The Supreme Court today released a decision saying IAG must pay Ridgecrest for damage to a building from four different quakes.

IAG had said it was only liable to make a payout for a final quake that left the building unable to be repaired.

The court gave the caveats that Ridgecrest cannot double count damage, and the total payout cannot be more than the replacement cost of the building.

Ridgecrest has been awarded costs of $25,000.

A lawyer specialising in insurance, Duncan Webb, says the decision could see property owners getting hundreds of millions of dollars extra from earthquake claims.

Mr Webb says many other commercial property owners have been putting off settling until this case was resolved.

He told Radio New Zealand's Checkpoint programme today he has six clients who want to make multiple claims on commercial properties. He says in some cases the amount may be double. Mr Webb said the outcome will, however, depend on how people's insurance claims are worded.

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