Reinstatement and “as new”


In East & anor v Medical Assurance Society New Zealand Ltd [2014] NZHC 3399 the High Court (Whata J) discussed the  timing of payments by an insurer on reinstatement of a house and considered whether proposed concrete slab foundation remediation methods met the “as new” policy standard.  The Court decided that the insurer was liable to pay the reinstatement costs up front and not as they were incurred.  It decided that clear wordng was required in the policy to require an insured to spend the money before the insurer was required to pay.  Witnesses for the homeowner apparently accepted that underpinning the foundation met the required standard. The insurer wanted to use LMG to relevel the slab.  The judgment comments that the Council decision about whether to issue a building consent for a proposed repair method would affect the assessment of policy compliance.  That view is wrong.  This case is subject to an appeal by MAS to the Court of Appeal that is to be heard 1 May 2015.