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Insurers slashing payouts to worn-down property owners are costing Christchurch millions or even billions of overseas dollars, a property lawyer says.

Emily Walton, a partner at law firm Wynn Williams, said commercial property owners wanting an end to drawn-out insurance battles are in some cases accepting less than half their entitlement.

"They are offered what seems like a sizeable chunk of money, and it's absolutely natural to just want the stress to stop," she said.

"But it means a lot of international insurance funds that should come into Christchurch through reinsurers will be lost.

"I don't want to have to urge people that they have a social responsibility, but it's something they should be aware of."

Walton said owners were taking indemnity payouts, and sometimes less, even if they had paid for rebuild policies. Indemnity payouts represent the market value of a structure, and for old buildings can be less than half replacement cost.

She believed owners with simple claims should have been paid long ago and that insurers were in come cases withholding funds as leverage. Some settlements were "just outrageous".

She said more owners were taking legal action against insurers, and she had had an "upsurge" in new clients. "People have got to the end of the year and they are just sick of it."

Walton said many owners of small properties were unaware a Red Cross grant could help pay for legal advice.

One big central-city property owner, who did not want to be named, said that after fighting with his insurer he settled for less than rebuild cost "so I could move on".

He was only partly satisfied with the payout. "No-one is ever happy, but I feel better and healthier, and I'll live a bit longer."

He negotiated an amount between indemnity value and replacement cost.

He advised other owners to "be stubborn".

About 1400 commercial buildings have so far been demolished in the city, with 77 demolitions under way and more to come.

Insurance payouts have been as big as the $70 million Kiwi Income Property Trust received for its wrecked 20-storey PricewaterhouseCoopers tower in Armagh St.

Settlements for earthquake damage in Christchurch are now coming from reinsurance companies in North America or Europe.

South Island Property Council head Glenn Taylor said Christchurch "absolutely" needed owners to "stick to their guns" and fight for full payouts.

"Insurance companies just need to honour their policies and not play games. We are just sick of hearing about the games being played. It just wears people down," he said.

The Insurance Council did not reply to a request for comment.

To listen to an associated interview on RadioNZ National please click here

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