Supreme Court rules against 'onsold' insurance claimant

UPDATE 3 July 2019

Ruiren Xu And Diamantina Trust v IAG New Zealand 

Statement from Lawyer, Peter Woods (Partner – Anthony Harper, ChCh) 

Xu deals with a case where the house was sold on an "as is" basis, with an assignment of the original owner's rights under their insurance policy to the purchaser. In the majority of "as is" sales, the rights are not assigned, as the original owner will have settled their insurance claim for the EQ damage to the house. They keep the cash settlement and the sale price is reduced. 


Judgment: Ruiren Xu And Diamantina Trust v IAG New Zealand

Wednesday, 3 July 2019, 1:34 pm
Press Release: NZ Supreme Court


Radio New Zealand, 3 July 2019

Christchurch owners of "onsolds" - homes with undiscovered earthquake damaged when sold - have been dealt a blow by the Supreme Court today.

There are potentially thousands of houses in the city with damage that had not been identified post the 2010 and 2011 quakes, that had been onsold to people who were only now finding out there were major problems, especially with foundations.

Today's court ruling could cut off their ability to get the original insurer to pay to fix that damage.

The Press reported the Supreme Court's majority decision backed the High Court's judgment, based on a 30-year-old precedent, that new owners could not claim the cost of full reinstatement if the previous owner, as policyholder, had not intended to restore the house. 

However, the Supreme Court's two dissenting judges said there was no reason the policy's replacement benefits could not be extended to new owners of the home.

Radio New Zealand: https://www.rnz.co.nz/news/national/393543/supreme-court-rules-against-onsold-insurance-claimant

Press coversage: https://www.stuff.co.nz/business/113962655/homeowners-lose-onsold-home-case-in-supreme-court

Simon Darby