If a homeowner’s insurance policy provides for a repair to be undertaken, then this is a private contractual matter that should be adhered to by both parties and governed by only the law of contract. The MBIE Guidance document does not override the insurance policy or compel the insurer to use it. So if the insurer does use, or has used, MBIE guidelines for a cheaper, lower quality scope and costing, rather than the contractual, and/or the building industry and legislated standard, what then?
Using these lesser standards will mean that aspects of homeowners’ repairs may be seriously compromised. MBIE solutions can sometimes produce different, cheaper and less robust methodologies of repair. This brings me to the next point – we are already seeing the consequences of some MBIE repairs. There are instances of repairs failing in our city. The quality of the housing stock in the city may be compromised. This could produce another round of disputes between homeowners and insurers, including EQC. Homeowners may try to recover the loss of equity in their properties and to rectify ‘failed repairs’. See http://www.stuff.co.nz/the-press/news/10441327/Cheap-fixes-devaluing-thousands-of-homes
The good news for us is that the law firm representing IAG/State (Young Hunter) in our upcoming court case, has formally advised the High Court on behalf of IAG New Zealand Ltd, that IAG/State Insurance does not consider the MBIE Guidelines to be the standard in the case of our policy. The standard is just as it says in our policy “as when new”. For us, this represents great progress and a real breakthrough. This is because for some years we have had several scopes of works produced upon the instruction of IAG/State that assessed our home to the MBIE Guideline standard. Despite repeated protestations that this was the wrong standard – scoping nevertheless progressed on this basis. As I see it this current clarification justifies the position we have held for several years now. Our legal team is delighted that this position has been unequivocally confirmed by our insurer.
We still have a three week High Court trial starting on September 21. The MBIE issue is one that will be covered in our case due to the scoping that was carried out. This is an issue thousands of policyholders (and the rest of the country) will be very interested to follow, as your many comments tell me. Feel free to attend at Court in Christchurch to watch the case as it unfolds.
Be sure to insist on the policy standard as the assessment and scoping criteria for your property too.
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