Insurance fight reaches High Court


4th March 2013

A crowd waving placards gathered at the Christchurch High Court today to greet Matt and Valerie O’Loughlin as they embarked on their landmark insurance case.

Today marks day one of the red-zoned Dallington couple’s week-long trial against insurance company Tower.

The couple are fighting the insurance company for the full replacement cost of their red-zoned home, rather than just the repair costs, in first-of-its-kind case to arise from the Christchurch earthquakes.

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READY TO FIGHT: Dallington couple Matt and Valerie O’Loughlin arrive at the High Court in Christchurch.

They had failed to reach an agreement with Tower after a lengthy discussion process and said they believed their house had been under-valued in their payout offer.

Before entering the court, Valerie said she was “all jittery inside”, but was feeling confident.

“It wasn’t really our choice to go to court, but we couldn’t get Tower to move.

“We just want a fair price for our home. We don’t want to pay for repair costs because we didn’t take out a repair policy.”

Insurance adjustor Andy Fusco of World Claim, who is working with the O’Loughlins, said the case would set a precedent for other red-zoned home owners in the city.

“It’s absolutely going to set a precedent for the future. We wouldn’t be having this discussion anywhere else in the world.

“It’s definitely going to be a win for them. I don’t see it going any other way based on the evidence.”

The couple were seeking up to $700,000 for the replacement of their home, and were also claiming $50,000 general damages from Tower.

The rateable value of the house was $420,000.

Tower had offered to pay for repair work totalling $337,000, which the O’Loughlin’s lawyer Grant Shand said was “half of what is required”, in his opening address.

He said they were covered under a natural disaster clause in their policy, which entitled them to the replacement of a “fully functional house” in the “same condition and extent as when new”.

“That’s what the O’Loughlins expected, that’s what was sold to them,” he said.

Justice Raynor Asher asked if the couple could then buy a better home than they initially had.

Shand said there was nothing in the policy that restricted them to buying an identical home, and “theoretically” they could.

It was not tenable for the house to be repaired in a red zone where there were no other houses being repaired, Shand said.

An inability to ensure continuing insurance cover on the repaired house and a lack of services in the area such as running water would mean it is not fully-functional.

“Tower’s proposed strategy will not get a building consent, and will not get a building code, because it can not be legally done … and no builder will perform these repairs.

“The O’Loughlin’s can not be made to assume the risk of this proposal not working.”

Emails from Tower to the O’Loughlin’s reiterated this fact, he said, reading that the property could be repaired “had it not been in the red zone”.

The couple had already received $203,000 worth of EQC payments over the course of the three earthquakes.

The case will recommence this afternoon, and was expected to be completed by Friday.

(Read full article here)