Impending limitation dates could cause problems for those with unresolved earthquake claims, with a Christchurch lawyer warning that brokers should encourage their clients to act now.
There is a six year time limitation on earthquake insurance claims and once the limitation period expires, insurance companies have a defence to all claims.
With the six year time limit for the first earthquake of September 2010 less than a year away, time was running out, said Michael Wolff
, a senior associate at litigation firm Grimshaw & Co in Christchurch.
Wolff said many members of the public would be unaware of this, but he said some brokers he had spoken to weren’t aware either.
“Most insurance claims are dealt with pretty quickly so this issue hasn’t really come up much,” he said.
“We would want brokers to be warning their clients with outstanding claims now so they still have a year to sort things out. Even if it doesn’t eventuate into anything they are able to take steps to protect their position rather than find out in a last minute panic.”
An added complication was the fact that legislation changed between the September 2010 earthquake and the February 2011 one.
Insurance claims relating to the September 2010 earthquake were governed by the Limitation Act 1950.
Any claims for the earthquakes occurring after 1 January 2011 will be governed by the Limitation Act 2010. As this is not yet six years old there is limited judicial direction on how it is to be interpreted, Wolff said.
One interpretation treats the start date as the point where the insurer declines a claim made under a policy while an alternative interpretation favours the start date as the time of the event that caused the insured loss.
To avoid such uncertainties, Wolff said it was better to act now.
This entailed filing a claim in the High Court or the District Court to stop the limitation running because it only runs until the date a claim is filed.