OPINION: Do you have a legal question arising from how the earthquakes have affected you? Lane Neave partner DUNCAN WEBB has agreed to be an "agony uncle" on how the law applies to certain situations.
Q: We are at the end of our tether. Our house has bad cracking to the ring foundation and is significantly out of level. There is also bad cracking to the brick cladding. The insurer is accepting that damage exists, but we don't think that the repairs that they are proposing are adequate - such as epoxying the cracks and just re- pointing the bricks. The insurer has said that they are confident in their expert's position and if we don't agree to their repair method they will just pay us the cash equivalent.
A: Many homeowners are concerned, like you, about the standard or extent of the proposed repairs. What is a proper repair depends on two things - first, what is good building practice, and second, whether the repair proposal complies with your rights under the policy.
In some cases the proposed repair is acceptable from a building and structural point of view, but is not acceptable under the policy. Thus, for example, if repointing the brick veneer will result in a strong, weathertight and safe exterior it is acceptable from a building point of view, however if it will result in ugly mismatched mortar then it will not be acceptable under the terms of most insurance policies.
Building standards therefore are the bare minimum of what is required and in many cases repairs must go beyond simply what is acceptable from a building and engineering point of view.
However the real question here appears to be what you should do next. In most cases it is possible to discuss these matters with your insurer (or the project manager that they have appointed). Those discussions may lead either to a satisfactory explanation, or to a change of their position. It appears that in your case this has been attempted without success.
For obvious reasons insurers will rely on the advice they get from their project managers and engineers. While those professionals will generally revisit their views if there is an obvious error, they will not generally do so simply because the homeowner has a different point of view.
This is problematic because homeowners are generally non-experts and cannot really know whether or not a technical solution (such as an epoxy repair) will be satisfactory.
If an insurer's expert will not change their view it is generally necessary to obtain your own expert view to point out any shortcomings. While this can be expensive (and time-consuming) it is often money well spent.
In particular, an expert employed by you has a motive to find all of the damage, develop a robust repair strategy, and cost it realistically. If the insurer's experts have overlooked anything, your expert will be able to point this out, and do so from a position of knowledge and authority.
You might consider using a lawyer to assist in instructing the expert (for example, by making sure that they understand the policy terms are the dominant consideration and not MBIE guidelines), however a lawyer's role at this point is minimal.
It is common for experts to disagree on various matters - for example, what is earthquake damage (and not pre-existing damage); what is the best repair method; and what it will cost. However, it is also common for that level of disagreement to narrow considerably if the experts talk to each other - and this is probably the most valuable part of the process.
Of course the process of engaging a building expert such as an engineer or quantity surveyor (or both) can be very expensive and should not be done lightly. There can be a very real question as to whether it will be "value for money".
In cases where your expert shows significant defects in the approach of the insurer the insurer (or EQC) lanewill consider paying for some or all of the cost - however this is by no means certain. However if your expert concludes that the proposed repair is adequate then you will have to bear the cost.
Where the experts disagree and the insurer will not change its position, there is a substantial dispute. You will then need to consider whether to accept the insurer's position or to embark on a dispute resolution process (whether that is a protracted negotiation, or litigation) and for that legal advice will be essential.
Finally, if you are employing an expert the quality of that expert is fundamental. An expert should be objective and careful (and be prepared to take a position you might not like). It is therefore useful to ask around for recommendations for experts who can do the work and have an established reputation.
Dr Duncan Webb is a partner at Lane Neave lawyers. Email questions for him to to firstname.lastname@example.org.
- The Press