Southern Response claim disputes head to court
Government insurance claims handler Southern Response expects about 400 difficult and lengthy disputes, over repairs or rebuilds of homes in Canterbury, with a good number ending up in court.
That is about 5 per cent of its thousands of earthquake claims related to 6763 Canterbury properties.
Legal action is underway now in about five cases, with more court cases to come as part of Canterbury's rebuild, the claims handler says.
Southern Response, a Crown entity, manages the earthquake claims of the failed AMI Insurance. The "good" part of the AMI business was sold to Australian giant IAG early last year.
Southern Response's disputes team was busy with around 130 "deadlocked" issues at present, chief executive Peter Rose said.
He said Southern Response was taking a firm but fair approach with "hardcore" customers with over cap claims that were hard to satisfy, and keeping a close eye on legal precedents set in the high and district courts.
"It's whether they are disputing the policy coverage or disputing the build or what value they should be . . . that hardcore (resolution) could go on for any length of time, the fortunate thing is it looks like about 5 per cent of our customers (as opposed to more)."
It was working to settle thousands of AMI claims relating to 6763 Canterbury properties where damage exceeds the Earthquake Commission (EQC) cap of $100,000.
It wants to complete the rebuild work by the end of 2016.
Rose estimated about 300-400 customers could be described as "hardcore".
"We've got a firm but fair policy, that essentially says we'll negotiate with customers, we'll look at their arguments and we'll respond to their arguments in a very legitimate way. But we won't compromise, compromise essentially says coming up with a figure to achieve agreement, so we're not going to do that."
Rose expects insurers will probably face "hundreds" of court cases - related to insurance claims.
Insurance Council chief executive Tim Grafton said the Canterbury earthquakes had reset the rule books, meaning there was no real benchmark as to how much legal action or dispute might arise from claims. He had not seen any evidence of a rising number of legal claims.
Rose said Southern Response had two main firms, Wynn Williams and Auckland-based DLA Phillips Fox, working "pretty strenuously" with them on resolutions, alongside other methods including discussions between quantity surveyors representing both sides.