An insurer has offered a settlement of $50,000, plus $5,000 toward legal fees, to a client after breaching the Fair Insurance Code.

A year earlier the client had made a claim with the insurer over cracks that had appeared in the walls of their home. The cracks were a result of vibrations caused by roadworks. Initially the insurer accepted the claim. A year later the insurer declined the claim relying on an exception that excluded damage resulting from vibrations.

The Insurance and Financial Service Ombudsman agreed that the insurer was entitled to rely on the exception. However, since the insurer was a member of the Insurance Council of New Zealand, the delays, lack of transparency and failure to follow up with the client were raised as serious breaches of the Fair Insurance Code. The insurer accepted this finding and offered to settle with the client.

Insurance companies under the Fair Insurance Code owe responsibilities to their client including acting honestly, transparently, and in good faith.

If you have a disagreement with an insurance company regarding a claim, it pays to consult a professional experienced in the area.

Alan Knowsley
Insurance Lawyer