NZ’s largest ever insurance claim on countdown to court

NZ’s largest ever insurance claim on countdown to court | Insurance Business

NZ’s largest ever insurance claim on countdown to court
Months of negotiations between Christchurch City Council and Civic Assurance have failed to resolve a major stumbling block in insurance claim negotiations affecting council-owned properties.

Now, council documents show it is reserving the right to go to court, reports Radio New Zealand.

It is understood the moot point is the $143 million claim for the city’s old sports stadium, Lancaster Park.

The council said the park was a write-off but Civic believes it can be repaired.

While the council was not commenting on negotiations, Civic Assurance CEO Tim Sole told Radio New Zealand he did not think legal action would be necessary.

“One never knows, but I don’t think legal action is what anybody wants or needs,” he said.

Sole said Civic’s own dispute with its reinsurer R+ V Versicherung was nothing to do with delays in its payouts in Christchurch.

“We’ve yet to agree, not just on Lancaster Park, but on a number of buildings, what the appropriate amount of money is.

“But that’s just healthy tension between the insured and the insurer.”

The outstanding insurance payout is said to be worth $912 million and the delay in payment has left the council proposing asset sales and rates rises to raise the money to rebuild the city.

With doubts over the future of major projects such as the town hall repair and a new stadium to replace Lancaster Park, the knock-on effect was investors wouldn’t open their wallets in the CBD.

Developer and spokesperson for central city property owners, Ernest Duval, said: “The risk that we now face is that we have built sufficient buildings on the periphery, Victoria Street, Addington, all these areas that have satisfied the demand, and that there is a diminishing business case to come into the CBD.”

If Civic pays out on the council’s claim it will be the largest ever settled in this country.

The current record-holder is the University of Canterbury which settled for $550 million and, before it, Lyttelton Port which settled for $440 million, with both featuring Vero as the lead insurer.