2016 saw the six-year anniversary of the 4 September earthquake and many insurers granted further time to property owners to bring claims. A number of those deadlines are looming again over the coming months, and this may impact on property owners and their ability to pursue their insurance claims.
Property owners could be too late to bring court proceedings if they have not sued their insurers before the limitation deadlines expire.
In general terms, the Limitation Act provides that court proceedings must be brought within six years to avoid a limitation defence being raised. There have been differing views as to when the six-year period starts in terms of earthquake insurance claims.
The looming deadline saw insurers agree to provide extensions of time for proceedings to be filed, but those extensions expire over the coming months.
IAG has said it will be relying on a limitation defence for any proceedings filed against it after 30 June 2018, while Southern Response has a 4 September 2018 deadline. Other insurers, such as Vero, have applied extensions of the limitation period on a case by case basis.
So what does this mean if you are a property owner with an unresolved insurance claim?
First, if you are a property owner who has an outstanding claim with your private insurer, then it is vital that you check that you have an extension, and to what date the extension has been granted.
If you do not bring a claim before the expiry of your limitation deadline you may lose the right to litigate your claim. 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.
If you bought the property after the earthquakes, or are a body corporate or non-residential policy holder, then different rules may apply to you, and we suggest you seek immediate advice.
What if your claim is still with EQC (i.e., under the cap), or you have had defective repair work undertaken by EQC? EQC's policy on limitation is on its website: www.eqc.govt.nz/canterbury-earthquakes/claims-assessment/limitation-legislation.
Rather than having an extension to a fixed date, EQC looks at when, or whether, the EQC claim has been settled. This can leave homeowners in a vulnerable position as these claims may eventually be put over the cap and passed by EQC to the private insurer. However, if court proceedings have not been lodged against the private insurer before the limitation deadline expires, the homeowner could by then be out of time to sue their insurer.
We would suggest that any property owners in this situation take legal advice as to their position and options as soon as possible.
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.