A couple’s home was severely damaged by storm.  Their circumstances changed which meant they had to sell the property before the repairs could be carried out. 

They engaged a real estate agent and disclosed the issue, but purchasers were very nervous about making offers as they were not sure how the process of taking over the claims would work.


Ideally, vendors should be repairing their properties before they put them on the market. However, this may not always be possible due to time and resource constraints associated with assessing the damages and repairing the property.

If vendors are selling their property before, or while the repairs are being carried out, they need to be cautious about any representations that they are making about the property. They should also be aware of what insurance rights they can or cannot assign to a purchaser.


Purchasers wishing to purchase a property which has been subject to Toka Tū Ake EQC (“EQC”) or insurance claims need to ensure that they are carrying out their due diligence, and check what insurance rights can be assigned to them as purchaser.

Assignment of insurance

EQC will allow the assignment of insurance claims from vendor to purchaser as a right as the insurance is connected to the land, rather than the individual owning the property.

On the other hand, private insurance policies are connected to the owner and usually include a clause prohibiting the assignment of insurance. Private insurers will consider any request for assignment of a policy on a case-by-case basis.

An assignment can become complicated where properties have both an EQC and private insurance claim, especially in situations where the EQC cap has been exceeded for the property.

Agreement for Sale and Purchase and Deed of Assignment

Where a purchaser wishes to take over the vendor’s EQC and/or private insurance claims, then the Agreement for Sale and Purchase will need to include a clause which states that the Agreement is subject to the confirmation that the assignment of insurance is possible within a stated timeframe, and that the parties will agree to the terms of assignment.

The parties should take into account the following in the Agreement:

  • any insurance payments the vendor has received from EQC and/or their private insurer which have not yet been applied to any repairs on the property;
  • any repairs carried out by a vendor which have not been claimed under EQC and/or the vendor’s private insurer; 
  • whether any residual insurance rights should be assigned where a home has already been repaired. This gives the purchaser the right to re-open an existing claim if the repair work is incomplete or did not cover the full scope of damage; and
  • where a property has been bought and on-sold, that there is a continuous chain of any deeds of assignment of insurance to provide the purchaser with residual rights.

Difficulties can arise if the purchaser tries to re-open an existing claim which exceeds the EQC cap as the purchaser will not have a right of recourse against the vendor’s private insurer. Purchasers should therefore carry out thorough pre-settlement building inspections to reduce their chances of future loss.

To assign EQC or private insurance claims a Deed of Assignment will need to be entered into between the vendor and purchaser. Your experienced property lawyer will be able to provide you with the right advice and a suitable Deed.

Vendors and purchasers should always receive legal advice from a legal professional before buying or selling a property to ensure that they are fully aware of their rights and responsibilities.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.