IFSO Case Study

Amy's* house was damaged in the Christchurch earthquakes. She made a claim under her house insurance and her insurer arranged the repairs.

Several years later, Amy found the repairs to be defective, but her insurer declined to remedy them. After a complaint was made to the IFSO Scheme, the insurer was required to rectify the damage, and the complaint was closed.

During the subsequent repairs, the insurer offered Amy $17,200 to cover temporary accommodation. This was the remaining balance of her policy’s allowance of $25,000, after what had already been paid to her during the initial earthquake repairs.

Amy made a second complaint to the IFSO Scheme, saying this was not enough. She said the insurer should cover all temporary accommodation expenses incurred as a result of the substandard initial repairs, which she estimated at $25,646.

In addition, she asked the insurer to pay an invoice for $19,564 for her representative’s services, which included meetings with the insurer and the preparation of the IFSO complaint.

She also asked that the contract between the builder, insurer, and herself include a section relating to temporary accommodation.

The IFSO Scheme reviewed Amy's complaint. Subsequently, the insurer offered to pay Amy the full temporary accommodation benefit of $25,000, disregarding the amount it had already paid to her. The IFSO Scheme believed this was a fair and reasonable outcome; however, Amy did not accept this offer.

Looking at the other aspects of her complaint, the IFSO Scheme did not believe the insurer should pay for Amy’s representative’s services or complaint preparation costs. Further, the IFSO Scheme could not make the insurer include any terms in the contract with the builder.

The complaint not upheld.

An allowance for temporary accommodation is provided in some insurance policies, usually with a maximum amount claimable. The IFSO Scheme cannot require insurers to include terms in repair contracts, or pay for their customers’ representative services.

Sept 2023

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