Report: Case may force insurers to pay up on quake-damaged homes

Report: Case may force insurers to pay up on quake-damaged homes | Insurance Business

Report: Case may force insurers to pay up on quake-damaged homes

A new report has shed light on botched home repairs by the Earthquake Commission (EQC) and why insurance companies may soon be forced into huge payouts for quake-damaged homes.

Radio NZ suggests homeowners, who ended up with defected homes and later found their insurer unwilling to cover the costs of repairs, pay attention to a Supreme Court test case against insurer IAG in November.

“If it finds in favour of the claimant, insurers across the board could be forced to pay out for quake damage discovered by the subsequent purchaser of a home,” it said.

Meanwhile, to avoid being caught with defective earthquake repairs potential homebuyers are advised to approach their hunt with caution. Christchurch property lawyer and Law Society’s property law section chair Duncan Terris reportedly said trying to save on the cost of building inspections is a false economy.

“If you’re buying at auction and you’re relying on a building report that was commissioned by that current owner and there’s a subsequent problem, you’ve got limited rights of recourse against the person that did that inspection report because it must be commissioned by you,” Terris noted.

Prominent earthquake claims lawyer Peter Woods, meanwhile, was quoted by Radio NZ saying the sheer number of “botched” EQC repairs meant extra homework for homebuyers, including hunting out defective repairs or undiagnosed damage. He recommended hiring a structural engineer, costing upwards of about $400.