The High Court has been asked to sort out who is legally responsible for insurance for properties damaged by the September and February Canterbury earthquakes.
The Earthquake Commission (EQC) and Insurance Council have agreed to refer the matter to the court after working on the issue for a number of
weeks, and said today the joint move was the best way to get certainty.
Under the Earthquake Commission Act 1993, EQC provides cover for damage to residential properties and contents from earthquakes up to a maximum of $100,000 for properties and $20,000 for contents.
The claimants' insurers provide coverage for amounts above the EQC's limits.
EQC and insurers want the High Court to clarify in what circumstances the EQC insurance will be reinstated back to its full limits after a natural disaster.
In the majority of cases it was clear that full cover has been reinstated but in a small number of situations it is uncertain whether EQC insurance will provide a further $100,000 of cover for the second event.
Both parties agreed payments to people who have suffered losses should not be affected.
"It's really about how much cover EQC is allowed to provide in these unusual circumstances," EQC chief executive Ian Simpson said.
They will lodge papers with the High Court in Wellington seeking a declaratory judgement on how to apply the Act.
- NZPA
