Limitation period for Canterbury earthquake damage claims
The Limitation Period issue for claims for earthquake damage to residential property is looming, once again. We expect that many hundreds, if not thousands, of homeowners in Canterbury will be affected.
4 September 2017 is a potential deadline for homeowners to file claims in Court for earthquake damage to their homes, even if their claims are still with EQC. All of these people are at risk of their insurer claiming that, as from 4 September 2017, they are too late to bring or pursue a claim under their insurance policy.
The current position of EQC and the various insurance companies on the limitation period includes:
Insurance Council NZ Members (ICNZ) (AA Insurance, FMG, the IAG brands, MAS, Tower and Vero) - On 18 December 2015, ICNZ stated that its members have agreed not to plead a defence under the Limitation Acts for any residential claim relating to the Canterbury earthquakes where proceedings are filed in the Courts before 4 September 2017.
Southern Response - On 30 March 2016, Southern Response stated that it will not rely on a limitation defence for any proceedings filed in Court before 4 September 2018.
Tower - In about July 2016, Tower stated that its interpretation of the law was that the six year limitation on legal action applies from the time a claim was settled or rejected, rather than from the date of the original incident.
IAG NZ Group (NZI, State and possibly Lumley (which was not part of the IAG group when the statement was made)) - In about July 2016 IAG NZ stated that it will not use the limitation defence for claims filed in Court and served on IAG NZ before 30 June 2018.
EQC - In August 2016, EQC stated that it will approach the six year limitation period as running:
a. Where an EQC claim has been settled, from the date EQC settled that claim;
b. Where an EQC has not yet been settled, from the date when EQC settles or declines that claim; or
c. Where a claim is declined, from the date that EQC declines the claim.
We wrote to the ICNZ on 11 May 2017 and requested that the ICNZ's members agree to defer any reliance on any limitation period defence, for any claims which EQC decides are over cap, for a period of no less than 12 months after the homeowner receives notice from EQC that the claim is over cap and has been transferred to their insurer.
On 25 May 2017, ICNZ responded to our letter, rejecting our request and stating that "each homeowner will need to approach their insurer to discuss [the deferment of the limitation period] in the circumstances of their particular claim".
This is a very disappointing response.
On this basis there is a possible impending deadline of 4 September 2017 for home owners (including those who are still with EQC, but who expect that their claims will give overcap) who are insured with an insurer other than Southern Response, Tower or the IAG NZ group. This category of insurers includes AA, FMG, MAS and Vero. We strongly recommend those homeowners ask their insurer to agree to further defer any reliance on a defence under the Limitation Acts beyond 4 September 2017.
If the insurer will not agree to further defer beyond 4 September 2017, we consider that the homeowner should file a legal proceeding in Court, before 4 September 2017, to protect their position.