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Southern Response ordered to pay up

A Christchurch couple has won a financial victory against government-backed insurer Southern Response.

The company offered Paul and Georgina Rout $443,000 on the basis that their house was repairable rather than a rebuild.

The payout was based on a theoretical repair because the land at Brooklands north of Christchurch is red zoned.

Up until Februrary this year, Southern Response had continued to argue the house was a rebuild before but then switched to claim it was repairable.

High Court Justice Gendall’s ruling explored the complex issues relating to exactly what insurance policies cover.

His final ruling was that Southern Response should pay for a rebuild figure of $673,330 after additions and deductions for various items.

He rejected a belated claim at the court heart hearing by the Routs' lawyer Grant Shand for $1.29 million.

The ruling sets a precedent for the way such calculations will be made in the numerous cases coming before the courts as insurers seek to minimise payouts.

Southern Response is the government-established successor to AMI Insurance.

More by Chris Hutching

Comments and questions

The appalling attitude of the insurance companies is criminal. If a house can be rebuild / repaired or what ever is completely irrelevant if they are in the red zone. The loss is total regardless because of the location.

The drums appear to be beating louder for NZ insurance company executives. 2014 is looking like 'the year of the ChCh earthquake claimant'

Finally an article that gets to the crux of this. Routs home destroyed in Earthquake. Govt owned insurance co lovingly referred to in Canterbury as Southern No Response give them a low offer. Too low infact to allow them to rebuild their home. Routs get independent pricing and estimates, SR reduce their offer even further and start arguing that the house can be repaired. Routs are forced like them to court and 3 years after earthquake finally get a settlement in line with their policy. There are currently in excess of 40 cases being heard against SRESL. You have to ask yourself what the board are doing.

So pleased to read this article - according to The Press - Southern No Response won the case. As Sarah #3 says - great that the article gets to the crux of this. Thank you.

thank you National business review for providing the nation with a balanced and accurate report instead of the biased, one sided reports provided by the Christchurch Press. No wonder so many people are cancelling their press subscriptions in Canterbury

i'd like to commend the lawyer Grant Shand, for representing the Routs and clearly doing a good job. nice to see a victory for the people!