November deadline for Kaikōura earthquake claims

Commercial building owners need to act quickly to protect their rights if they want any hope of recovering insurance payments for damage caused by the Kaikōura earthquake, according to an insurance law specialist.

Stuart Stock, of law firm White, Fox & Jones, said the Limitation Act provided a six-year window for most civil claims, including against insurers, to be brought to court.

November 14 marks six years since the magnitude 7.8 earthquake caused massive damage to buildings throughout the centre of New Zealand.

In Wellington alone, the earthquake caused an estimated $1.5 billion in insured losses, mostly from commercial buildings, but many Wellington claims have not been resolved or even pursued, Stock said.

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After November 14, a building owner could lose the ability to enforce their claim for earthquake damage, a potential loss of millions of dollars, he said.

“It is not just theoretical either, insurers can and do use this defence. We are currently dealing with proceedings against two separate insurers that are both using the Limitation Act as a defence.”

Stock said many owners do not understand that the limitation window applies even if they are in the process of trying to resolve the claim with their insurer without going to court, and even if the insurers have indicated they may accept the claim.

“Claimants who know about the limitation period may worry that raising it with their insurer will jeopardise the negotiations. But insurers are all well aware of the relevant dates.”

It was possible to negotiate an extension of the period, but there were strict rules around how this must be done and documented, Stock said.

In practical terms, to be effective, any extension would have to be agreed and documented before November 14, 2022.

Stock said that before proceedings can be filed, building owners should have insurance claims lodged and expert reports prepared, a process which itself can take months.

After the Canterbury earthquakes, there were 1349 separate claims filed in the High Court in Christhurch against insurers (including EQC) for unpaid earthquake claims. Of those, 296 were filed in the four months before the limitation periods ran out.

Stock said in comparison, there had been just one claim filed by his firm in the High Court ­in Wellington against an insurer relating to damage caused by the Kaikōura earthquake.

“It is inconceivable that all the damage arising from the Kaikōura earthquake has been assessed and quantified, and insurance claims filed, accepted, settled and paid out with just that single dispute.”

There was no one size fits all when it came to insurance claims, so building owners must seek their own specialist legal advice even if, and especially if, they were currently negotiating directly with their insurer, he said.

“However, the clock is ticking. Wellington building owners need to act immediately to preserve any claim they might have against their insurer for damage caused by the Kaikōura earthquake.”