A lawyer for Tower Insurance says the idea that the company should have to compensate policy holders for losses suffered as a result of being declared part of Christchurch's residential red zone, is commercial nonsense.
Tower has been summing up its case in the Christchurch High Court today, where a couple are taking on the insurer over the amount of money it is willing to pay out for their earthquake damaged home.
Matt and Valerie O'Loughlin say Tower owes them for a complete rebuild of their red-zoned house and not just the repair Tower says they are owed.
Today Tower's lawyer said the couple were only covered for the physical damage to their home.
He rejected the idea the insurer was obliged to compensate them for the economic loss they had suffered, in addition to the damage to their home.
The company's lawyer said a ruling along these lines would force insurers to pay to replace thousands of red zoned homes, regardless of the level of damage they had sustained.
Tower Insurance also says the Christchurch couple has failed to prove the company did not fulfil its obligations under their policy to repair or replace their earthquake damaged home.
In his closing submission at the High Court in Christchurch, Tower's lawyer Alan Galbraith QC said it was up to the O'Loughlins to prove a repair could not be carried out on their home and they had failed to do that.
Mr Galbraith said the engineers Tower hired to come up with a repair plan had presented a proposal that stood a good chance of gaining the necessary consents from the council.
He said it was irrelevant the house was in the red zone and would have to be vacated in the next few months as the red zone is vacated.
