Christchurch residents making insurance claims for earthquake-damaged or destroyed homes have been urged to get legal advice rather than accept a payout which they later regret.
The New Zealand Law Society was worried some residents were settling for less than their full entitlement, Christchurch lawyer Andrew Logan said.
He said he was not accusing insurance companies of ripping off their clients.
"What I would say is that the insurer is always there to meet the liability. But that expectation of what the homeowner has and what the insurer wants can be quite different.
"There's an expectation probably on the part of most people who have a policy that the insurance company will be most generous towards them when in fact that is not what the insurance company will want to do.
"The insurance company will want to limit its liability as much as it is able to do."
Mr Logan advised homeowners to consult a lawyer if they had any difficulty understanding their policies or were not happy with what had been offered to repair or rebuild damaged homes.
He said all Christchurch people were experiencing a stressful and trying time and it was very natural for them to want to settle insurance claims and start rebuilding for the future.
"The problem is that if you don't take a careful look at the terms of any settlement agreement, you could find you have bound yourself to accepting something which is much less than could be gained by negotiation."
He also urged homeowners to take advice when contractors asked them to sign agreements for work being paid by EQC as some had ended up having to make up a shortfall in the agreed amount.
People buying or selling a house in Christchurch should determine who was responsible for repairs or other matters caused by the earthquake.
"The usual agreements do not allow for this and some specially drafted clauses might be required," Mr Logan said.
"Everyone has the right to consult a lawyer before committing themselves to signing a contract or agreement. Lawyers are trained to examine the fine print and the result of any proposed agreement. Their duty is also to ensure that their client achieves the best possible outcome," he said.
Insurance Council spokesman Brett Solvander said the council welcomed the move by the Law Society to keep people better informed before they accepted an insurance settlement.
He said people often saw the advantage of an early settlement if they could earn interest on it or put it into another home.
Anyone with problems could also go to the insurance ombudsman.
He said the council was not aware of individual cases where people had settled only to find it was not enough to rebuild their homes.
"We would be happy to look at those if people wanted to talk to us."
However, that did not mean an insurance company would reconsider a settlement.
He said the council would welcome a legal view before a settlement.
"We think it is everybody's best interest that people are on an equal footing and fully informed," Mr Solvander said.