Multiple events and proof of loss/damage


The Courts have confirmed the ability of insureds to recover for separate damage to insured buildings in separate quakes even where the total recovery then exceeds the sum insured under the policy.  This has caused issues about proving the extent of the damage in each earthquake and remedial scope/costs.  In Vero Insurance New Limited v Morrison & anor [2015] NZCA 246, 16 June 2015 the Court of Appeal considered the use of a model based on ground shaking as a method of allocating damage and repair costs.  The industrial/commercial building at 23 Heathcote Street, Woolston was insured by Vero Insurance for $4,004,300 per event.  It was damaged in the Canterbury earthquakes.  The building continued to be functional and tenanted after the quakes, so was not destroyed for the purposes of the policy.  Vero paid $79,881 for damage in the September 2010 earthquake and the sum insured of $4,004,300 for the February 2011 earthquake.  It considered that the June 2011 earthquake did not increase the repair scope.  The owners via Risk Worldwide sought to recover $10,042790.83.  Th Court decided that the Risk Worldwide model was not as reliable as actual inspections and not of great assistance because it did not include liquefaction damage as part of its inputs.  So the Court accepted the Vero amounts for September and February 2011, but sent the claim back to the High Court to reassess the small amount of damage for June 2011.