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Christchurch property owners have been advised to stand up to their insurers, as LIZ McDONALD reports.

Insurance companies do not always play fair and policy holders need to fight for their rights, a Christchurch lawyer has told city commercial-property owners. .

Richard Johnstone, a partner at law firm Wynn Williams, made the comments as part of a panel at the "Getting It Right, Now" insurance seminar.

Johnstone said that, while insurance companies were meant to act in good faith, property owners needed to arm themselves with reports and information from the experts and stand up for themselves.

"They [policy holders] rely on their insurance company playing fair. There are a lot of games, and they are not always playing fair.
"Information wins. Get the information you need."

Johnstone said that, while some insurance companies had balked at paying for rebuilds on alternative sites, such as when properties were being taken by the Government, owners were entitled to such cover unless a policy specifically ruled it out.

They could also ask to rebuild as a joint venture with other owners.
He suggested asking insurers to pay interest on delayed payouts - "it's worth discussing as an option" - and asking the Canterbury Earthquake Recovery Authority (Cera) to help out by talking to insurance companies.
He also urged the owners to take legal action if needed and said the courts would likely favour insured parties, and prioritise hearings, in the rebuild environment.

"Don't be afraid of taking that step, because it might just ensure that the fight is fair."

Fellow Wynn Williams partner Emily Walton advised owners to look carefully at their policies, clause by clause.

"Owners should try to get what they are entitled to, and have paid for through premiums. But there are many different policy wordings, " she said.

"The devil is in the detail."

"Tenacity is the way to go. It pays off in the end."
Policies arranged through brokers, rather than directly, were usually more favourable to the insured, she said.

Walton said some policies stated that excesses would be deducted from the insured party's loss, not the sum insured.

This meant those not fully insured should not have to forfeit some of their payout, she said.

Johnstone said insurers were careful what they paid out on because their reinsurers were now footing the bill. Reinsurers would pay only to the letter of the policy, meaning generous insurers could be left short.

He said that, while taking a cash settlement worked for some owners, they needed to be careful of unexpected rebuilding costs.

Demolition, especially, could be pricey and having the insurer foot the bill directly could be better, Johnstone said.

Insurance broker Vivian Frew, team leader of claims advocates at insurance brokerage Marsh, said the quakes presented a "windfall opportunity" for insurers, and some were being more reasonable with their clients than others.

She reminded owners that while brokers represented the insured party, loss adjusters were working for the insurer.
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