Canterbury homeowners say a tough new stance by insurance companies could cost them tens of thousands of dollars and one says it is costing him his health.
The region's two biggest insurers IAG and Vero say they will not pay to rebuild homes sold since the earthquakes, capping settlements at a lower indemnity value.
They are also refusing to pay out for accommodation during repairs.
Together the insurers have two-thirds of the market.
IAG owns brands State, NZI, AMI and Lantern.
Lee, who did not want his surname used for fear of making things worse with his insurer, said he could not afford to replace his badly damaged Parklands house without a rebuild payout.
He had been in the process of buying the brick home when the February 22, 2011, quake hit and was unable to get out of the purchase.
The house seemed undamaged but State Insurance, the estate agent and his lawyer assured him he would be covered for any repairs.
The house has since subsided and is seriously damaged.
An engineer found it would cost more than the $100,000 cap to repair, Lee said, but State would not confirm whether it was repairable until the TC3 land has been assessed.
He believed the minimum he would lose is $90,000.
"I would just have to walk away.
"I am 40 years old and I would just have to start again," Lee said.
"We saved so hard for the deposit, and we have a big mortgage.
"We can't sell it. No-one would touch it with a barge pole now."
Lee now has health problems linked to stress.
"Had they [State] made me aware of this at the time, I would've pulled out of the house purchase, losing [$20,000] and making myself homeless in the process, but [that is] better than where I am now."
It is understood that both IAG and Vero recently took legal advice and revised which rights to transfer to new owners.
They had previously said all insurance rights would be assigned to buyers.
The reinterpretation has also caught out lawyers and real estate agents.
Wayne Bishop pulled out of buying a Burwood house when he realised he could be left short by the new rules.
Bishop, whose Bexley home was red-zoned, had wanted the property as an investment he could live in later.
But finding damaged foundations and no up-to-date scope of works, he questioned IAG at his lawyer's insistence and learned they would not cover a rebuild, even in case of fire.
He cancelled the sale, despite having paid for a property inspection and legal fees.
"It was a $400,000 house, it's a lot of money and we didn't dare risk it. We could have been left with no house and because it was TC3 land, you could end up with a section of no use to anybody.
"I just couldn't do it, but I felt sorry for the owner or anybody in that situation. They are just trapped."
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