This week the Supreme Court reached a decision in the case of Ridgecrest v IAG New Zealand. Click here to read about it in full.
While some commentators have suggested that the decision sets a precedent for the industry, Insurance Council New Zealand (ICNZ) and IAG NZ disagree. ICNZ’s Chief Executive Tim Grafton said: “ICNZ’s advice is that the Ridgecrest decision is not a game changer for the industry because the Supreme Court’s decision revolved around the somewhat unique wordings of that policy that are not common to other commercial policies.”
IAG NZ’s view is that:
– This case is unique due to the particular policy wording that was under consideration by the Supreme Court, and therefore it is unlikely on its own to set a precedent for other commercial earthquake cases that are before the courts.
– The claim itself, which is still before the courts, can now proceed based on the principles clarified by the Supreme Court, including that the insured isn’t entitled to recover more than replacement value of the building or to double-count its losses.
A perspective of the insurance issues considered by the Court is offered by law firm Fortune Manning, one of IAG’s legal panel, here. Tell us your view in the comment section below.