It seems like only yesterday but September 2015 marked 5 years since the start of the series of earthquakes that devastated the Canterbury region. With most insurers talking high percentage rates of claims settlements, both domestic and commercial, the demanding rebuild effort is well into gear.
However, there are still a number of claims which have yet to be resolved.
In New Zealand 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 defence under the Limitation Act.
What you need to know
Do you have a claim that has not yet been accepted or declined?
Do you have a claim 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.
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 to such proceedings if you decide to file these later than six years after the loss occurred.
The potential effect of this on your settlement negotiations in the future may be that insurers could:
- Provide an ultimatum or,
- Walkaway from the table.
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 only in relation to the September 2010 earthquake this will be dealt with under the Limitation Act 1950. The time limit is 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.
The looming dates will no doubt encourage insurers, gun shy of further litigation costs, to hopefully loosen up on settlements. But if you have an unresolved earthquake claim, we recommend you seek legal advice now to ensure you have sufficient time to take the right action.
About the AuthorName: 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…
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.Close