The Court of Appeal has dismissed an appeal by a policyholders in relation to their insurance claim against Lumley arising out of the Canterbury Earthquakes: Jarden v Lumley General Insurance (NZ) Ltd  NZCA 193.
A point of particular interest arises in the decision. The Court determined that Lumley’s “top-up” cover to pay for damage caused by a natural disaster which was stated to be in excess of cover provided under the relevant provisions of the Earthquake Commission Act 1993 was for cover in excess of EQC’s actual (statutory) liability. This is not always the same amount the EQC actually pays to policyholders, and was not in this case. Lumley was entitled to be satisfied that any sum paid by the EQC equated with its liability under the legislation (refer paragraph ).
With regards to this issue, the Court accepted a submission from Lumley that its cover and premiums are fixed on the basis of EQC’s actual statutory obligation and that it is not open for the policyholder to alter unilaterally the basis upon which Lumley’s liability arises under the policy (refer ).
23 May 2016