The interim decision in the recent court case against Tower involving issues about repair v rebuild, and the red zoning of the area, has been released on-line.
The Summary of Findings is reproduced below, and the full judgement can be downloaded from here. While the decision focuses on a Red Zone situation some of the judgement may have relevance for those in the Green Zones where repairs are being assessed and costed.
Some basics from the case so far seem to be (references in brackets are to the sections in the Summary of Findings below):
- Insurance companies are bound by the terms of their insurance policies and
- Zoning of areas of land are outside the terms of insurance contracts because the zoning decisions did not cause any physical damage to the property (a, b) and
- Insurance companies can exercise their discretion on whether to repair, rebuild or offer a payment if this is allowed by the policy (c, e) and
- If the insurer elects to repair a property, the pricing for the repair is to be on the basis of doing so on good ground, unless there is a serious intention to build on the existing site (f), and
- The insurer, in pricing a repair, is obliged to ensure it’s calculation is reasonable and in accordance with its contractual obligations (e), and
- The insurer, in offering payment, must offer an amount that is the replacement value, or equates to the actual cost of bringing the house back “to the same condition and extent as when new” under the insurance contract ( c).
The judge’s interim decision is in section (h) below.
For those concerned that the repair being offered by an insurer is inappropriate (e.g. re-levelling) should look at the full judgement starting at para .
As always, I am not a legal specialist and may not necessarily have explained this as was intended in the judgement. Consult a legal advisor if this information is important to your claim. Click on the link to continue.