Insurer avoids earthquake claim due to 30-year building defect

Insurer avoids earthquake claim due to 30-year building defect | Insurance Business New Zealand

Insurer avoids earthquake claim due to 30-year building defect

IAG New Zealand has avoided a couple’s earthquake claim due to a 30-year building “defect.”

Rose and Rob Spijkerman’s house, which was built 35 years ago, was damaged in the 2010 Christchurch earthquake.

The couple thought that the cost of getting the house back to a habitable condition was $2 million to $3 million. However, the Earthquake Commission (EQC) claimed that the damage to the 6,000-square-foot house was below the $100,000 cap.

The case was eventually passed to the couple’s insurer, IAG.

However, IAG avoided the earthquake claim, saying that the house’s defects that happened during construction more than 30 years ago were not disclosed when the Spijkermans applied for insurance in the early 2000s. Avoiding the claim meant that the insurer treated the policy as if it never existed.

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Part of IAG’s argument related to council documents listing Rob as a contact for the builder, which was seen as proof that he should have known about the details of the construction.

However, Rose said there was no way they could have known about the defect. She added that the main concern of IAG was a lack of mesh in the floor, which had already been signed off as acceptable by a council engineer.

"With every new house there's a snags list and they're saying we should have disclosed that… IAG is being utterly ruthless with what they are doing and blaming us for non-disclosure at the time of the earthquake for something that happened 30-plus years ago,” Rose told

The couple will go to court to overturn IAG’s decision.