EQC and insurers in legal battle over cover

8:58 pm on 4 August 2011

The question of how much the Earthquake Commission (EQC) should pay out for buildings damaged in natural disasters is being debated in the High Court in Wellington.

The case has arisen from multiple claims made by some Christchurch residents whose homes suffered damage both in the September and February quakes.

Three High Court judges are hearing the case which involves EQC and a number of insurance companies.

The Earthquake Commission's lawyer, Jack Hodder, told the court on Thursday the core issue is whether the $100,000 payout provided for in the commission's legislation is paid only once for a particular building, or applies to every individual disaster event.

Mr Hodder said the EQC cover is the first layer of insurance and provides a safety net for many homeowners - but does not provide indemnity for all.

Private insurers represented at the hearing, which include Tower and IAG, say there are anomalies in the EQC legislation and want the court to sort them out.

The insurers say the amount should be paid out for damage suffered in each individual earthquake event.

The case continues on Friday.