Hundreds of Christchurch residents with quake-damaged homes could be caught out after the country's biggest insurer revealed it would apply a statute of limitations defence against future claims.
The untested rule applies a limit to the amount of time people have to take court action against an insurer.
Until this morning, IAG - which owns the State, NZI, Lumley and AMI brands - was saying homeowners had until the middle of next year before it would use this defence.
However, it appears to have shifted the goal posts and now says some homeowners will only have until tomorrow to take court action.
The statute of limitations provides a six-year cut-off for court action to be taken.
The clock started ticking from the day of the 4 September earthquake in Christchurch.
The period was subsequently extended by another year by some insurers, including Vero.
IAG went a step further and extended it to 30 June next year.
But Lisa Taylor, a lawyer with Anthony Harper, said she was informed this morning by the insurance giant that in the case of those who had purchased earthquake-damaged homes since the earthquakes and had claims assigned to them, their time would be up as of tomorrow.
"We think it is outrageous, people have seen these statements which have been widely publicised for a number of years and for IAG to now come out and say this is what it is going to do, is going to frankly put a lot of stress and anxiety on homeowners who are in this position and who have little or no time to now file proceedings in the high court."
Ms Taylor said there was a good chance the new deadline might never have been revealed at all if her law firm had not pushed IAG to make clear its stance.
One day was not going to be long enough for most people to be in a position to file a claim in the High Court, she said.
"We are of the view that IAG's position, because they have so widely publicised the fact that they are not going to rely on this, that they now need to give reasonable notice, which we believe would be three months, for people to file a claim."
Mel Bourke, an advocate for those with outstanding insurance claims, said applying the statute of limitations rule and preventing homeowners from taking insurers to court tipped the scales dramatically in favour of companies such as IAG.
"It's major from the point of view that, that ability now to negotiate... you've got no leverage, so that has just disappeared. So the private insurer can just do 'talk to the hand,' and what can you do? You can't do anything."
She said there could be as many as 11,500 homes where EQC had underestimated damage and where it could be extensive enough for claims to be handed on to insurers to settle.
It could take months or years for this to be established and at the end of it claimants could be left out in the cold with no ability to challenge their insurer in court, she said.
"I don't want to be a conspiracy theorist but it sort of smacks of the later notice they give the harder they make this for people. That's one of the things I would love to see the New Zealand Government, whoever that might be, ensure homeowners throughout New Zealand are never ever put in these positions ever again."
Ms Taylor has advised anybody with IAG who has had a claim assigned to them by the previous owner to contact their lawyer immediately for advice.
In a statement, IAG said it never promised to extend the deadline for those with claims assigned to them and that this was only ever done for the original owners of the quake-damaged properties.