The insured had a policy which covered his house and driveway and the driveway was damaged by an earthquake.  The EQC covered the cost of the land damage under the driveway and a claim was made to the insurer for the damage to the asphalt surface.

Problems arose because the insured shared the driveway with four other houses and therefore he was only liable for one-fifth of the repair cost of the asphalt.  As the total asphalt cost was $10,900 and the insured had an excess of $5,000 his one-fifth share of the repair costs meant that his share was less than his excess and the insurer was not obliged to pay out anything for the repair. 

That decision was upheld by the Insurance Ombudsman who said that the insurance company was entitled to rely on the policy and apply the excess to each owner’s policy and therefore there was nothing to pay to each owner.

Alan Knowsley

Insurance Lawyer