Unresolved Earthquake Claims At Risk

It seems like only yesterday but September 2016 will mark 6 years since the start of the series of earthquakes that devastated the Canterbury region.

The Insurance Council of NZ quotes 6% of all commercial / business claims are still unresolved.  New Zealand’s Limitations Act will start to impact on these claims from 4 September 2016.

Deadline imminent for unresolved claims

The Limitation Act sets a period of time (generally 6 years) in which to bring about proceedings in Court for any claim you feel you have.

After this 6 year period your insurer is provided with a complete defence in Court which means your insurer could:

  • Provide you with an ultimatum
  • Walk away from the negotiating table


Do you have a claim relating to your business that has not yet been accepted or declined?

Do you have a claim relating to your business that you have not yet agreed the value on?

If you answered YES then we recommend you seek legal advice and potentially file Court proceedings against your insurer. 

This needs to be done within 6 years of the date of the earthquake that caused the loss.  This needs to be done even if you are in the negotiation process with your insurer.

Filing proceedings now gives you the option to take your case to court at a future point, with the opportunity of the best outcome, if you and your insurer cannot reach a suitable agreement.


Do you have a residential claim that has not yet been resolved?

On the residential front, numbers quoted in a recent Insurance Business article state 340 people are yet to receive offers from their insurer and there are another 453 properties where people have yet to make decisions on the offers they’ve received. 

If you have an unresolved residential claim your time limit for filing proceedings may have been extended.  Insurers who are members of the Insurance Council of New Zealand have agreed to extend the time limit until 4 September 2017 BUT this only applies to certain insurers and only for residential claims.  Check if your insurer is a member of the ICNZ.


Do I really have to start court proceedings?

If you do not file in Court, you run the risk of your insurer being entitled to a complete defence if you decide to file proceedings later than six years after the loss occurred. 

So YES, to ensure the best outcome for your claim, we recommend you start proceedings.

When did my 6 year time period start?

To add to the complexity of filing a claim in Court, on 1 January 2011 the Limitation Act 2010 was introduced, replacing the Limitation Act 1950.  The new Act introduced a new structure around the time limits and in particular from what dates these commenced.

September 2010 Earthquake

If you are involved in a claim dispute in relation to the September 2010 earthquake this will be dealt with under the Limitation Act 1950.  The time limit is 4 September 2016, 6 years from the date of the earthquake.

February 2011 Earthquake and following

If you are involved in a claim arising out of the February 2011 and following earthquakes, the ‘6 year’ period is slightly more complex.  With a lack of judicial direction so far in respect of the Limitation Act 2010 (given it’s newness), legal experts are divided on how it will apply to insurance claims.  One interpretation treats the start date as the point where an insurer declines the claim.  However an alternative interpretation favours the start date as the point when damage occurs.  Because of this complexity, we recommend filing proceedings prior to 6 years from the date of the earthquake to ensure your claim is within the time period.


Who can I talk to?


If you are concerned or would like more information, talk to your legal adviser or one of our brokers.

David Walton

About the Author

Name: David Walton        

I have been involved in the insurance industry since 2004. Initially this was in a legal capacity before I moved into a commercial insurance role some years later. My legal background is put to good use at Rothbury…
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I have been involved in the insurance industry since 2004. Initially this was in a legal capacity before I moved into a commercial insurance role some years later. My legal background is put to good use at Rothbury where I am Senior Technical Advisor as well as manager of Rothbury's Motor Vehicle Underwriting businesses.


Disclaimer: The articles published on this blog are designed to provide general information and do not take into account any individual’s particular circumstances. We recommend that you obtain professional advice on your requirements before making any decision about a financial product.

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Feedback & Comments


Hi There
The 6 year limitation period starts when EQC has settled or declined a customers claim. It does not start at the date of the event. This will mean individual claims will be different.

Kind regards

Added By: Rebecca         Date: August 23 , 2016 Comment:

Hi Rebecca, Thanks for your comment and I’ve emailed you direct too.  EQC does have their own approach to on the Limitation period for the EQC portion of the claim (up to $100,000).

For the portion of the loss that is over the $100,000 limit private insurers are working to the 6 year period.  4th September is when the Limitation Act defences could be imposed.

Insurance companies who are members of Insurance Council of NZ have publicly stated that they will extend the limitation by 12 months.  For our clients who aren’t insured by members of ICNZ we are working on their behalf to obtain in writing that the insurer will not impose the limitation on 4 Sept 2016 and where this is not possible we are recommending they seek legal advice and file in court before this date.

Please get in touch with one of our brokers if you would like any assistance.

Added By: Sarah Money         Date: August 29 , 2016

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