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
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
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
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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