Insurance as a contract condition for Christchurch

The New Zealand Law Society’s Property Law Section has advised members that it understands that, despite recent media articles, some insurance companies are now permitting assignments of existing policies in Christchurch and advancing new insurance cover, including in some affected areas.

The Property Law Section says there have been reports of this occurring on a case-by-case basis, so it would pay for lawyers and/or their clients to approach a few different insurers to confirm whether they are willing to provide cover or not. Those companies may have varying requirements such as reserving the right to approve the new purchaser and requiring geotechnical and/or engineers reports.

“In every case, we recommend that the ability to obtain insurance is a condition of the contract prior to confirmation. Additionally, in respect of sections being purchased with a view to building in the future, purchasers should ensure that a builder can obtain builders risk cover and that home owners cover will be available once the property is completed. There have been several instances of the home owners insurance not being available once the building is completed,” the Section says.

© New Zealand Law Society 2008