Insurance Law FAQs

Tim Gunn has recovered more than $10 million in insurance claims for New Zealand policyholders and has acted as lead counsel in High Court decisions cited in Colinvaux's Law of Insurance in New Zealand (3rd ed.) — the leading authority on insurance law in this country.

Declined & Disputed Claims

Q: My insurance claim has been declined. What should I do?

The first thing is not to accept the decision. Many declined claims are successfully overturned with the right legal advice. Ask the insurer for the full written reasons for their decision, and request a copy of your policy document if you don't have one. Then seek independent legal advice before responding, as your initial response to the insurer may affect your position later.

It is also important to understand that in any insurance claim, the onus of proof rests with the policyholder — that is, it is your responsibility to prove that your loss is covered by the policy. This means taking an active role in gathering and organising evidence to support your claim from the outset, rather than waiting for the insurer to lead the process. Tim can assist with this from the initial stages.

For insurance review cases, Tim offers a no-obligation initial discussion at no charge, followed by a fixed-fee initial consultation of $750 plus GST, which includes a review of your claim, the reasons for the declinature and providing initial advice. There is then an option of a further fixed fee of $1,500 plus GST for a formal letter of challenge, suitable for use in either internal dispute resolution (IDR) or with the IFSO.

Q: How long does a policyholder have to dispute a declined claim in New Zealand?

This depends on the terms of your policy and the method of dispute. Most policies set time limits on raising complaints, typically ranging from one to three years. There are also time limits for accessing the Insurance & Financial Services Ombudsman (IFSO) scheme. Acting promptly is important — contact Tim as early as possible after receiving a decline letter.

Q: Can an insurer decline a claim for non-disclosure?

Yes. Under current New Zealand law, insurers can decline or avoid a policy if a policyholder failed to disclose material information at the time of application — even if the non-disclosure was innocent or accidental. However, this is a complex area of law and many such declinatures are challengeable. Tim has extensive experience in non-disclosure disputes and has successfully challenged decisions where the insurer's interpretation was unreasonable or disproportionate. New Zealand's law in this area is widely regarded as harsh, and Tim is an active advocate for reform.

Importantly, the Contracts of Insurance Act 2024 represents the most significant reform to insurance law in New Zealand in decades and will change how non-disclosure is treated when it comes into force. However, it does not take effect until November 2027, with the delay allowing insurers time to update their policy documents. Until then, the existing law continues to apply.

Q: What is the process for challenging a declined insurance claim?

There are several available pathways. The first step is internal dispute resolution (IDR) — requesting the insurer formally review the decision through their complaints process. If this doesn't resolve the issue, you can escalate to the Insurance & Financial Services Ombudsman (IFSO) at no cost to you, for disputes up to $500,000 plus GST (this limit increased on 18 July 2024). For higher-value or more complex disputes, legal proceedings in the District Court or High Court may be the appropriate route. Tim advises on the most effective strategy for each situation from the outset.

Q: Does Tim act for policyholders or insurers?

Tim acts exclusively for policyholders — never for insurance companies. This means his advice and advocacy are entirely focused on achieving the best outcome for the person or business making the claim.

Income Protection, TPD & Trauma Insurance

Q: My income protection claim was declined because of a mental health condition. Can I challenge this?

Yes, and Tim has done this successfully. He has overturned declined income protection and disability claims based on clinical depression and other mental health conditions against New Zealand's largest life insurers, including a published case against AIA involving a $173,000 recovery. Insurers frequently apply overly restrictive definitions of disability to mental health claimants, and many of these decisions can be challenged. Mental health-related insurance disputes are an area Tim is particularly experienced and passionate about.

Q: What is a total and permanent disability (TPD) claim?

A TPD claim is made on a life or disability insurance policy when the policyholder suffers an injury or illness that renders them permanently unable to work. Insurers often dispute these claims on the basis of the definition of 'total and permanent' disability in the policy wording, or by arguing that the policyholder could perform some form of work. Tim has recovered more than $10 million for NZ clients in TPD and income protection claims over the past five years.

In a TPD claim as with any insurance claim, the onus of proof rests with the policyholder. Therefore, it is your responsibility to prove that you are TPD and therefore covered by the policy. This means taking an active role in gathering and organising expert medical and financial evidence to support your claim. Tim can assist with this from the initial stages.

Q: Can an insurer decline a claim because of a pre-existing condition?

Insurers can exclude or limit claims for pre-existing conditions if the condition was properly disclosed and excluded at the time the policy was written. However, disputes often arise where the insurer seeks to rely on an exclusion for a condition that is unrelated to the actual claim. Tim advises on the strength of the insurer's position and whether the exclusion or declinature can be challenged.

House, Flood, Natural Disaster & NHC Claims

Q: My earthquake or flood claim has been under-settled. What are my options?

Under-settlement is one of the most common insurance disputes Tim handles. Insurers and Toka Tu Ake (the Natural Hazards Commission, formerly EQC) frequently offer settlement amounts that do not cover the full cost of reinstating a property to its pre-damage condition, particularly where the damage is complex or the property is in a high-risk area.

Tim works with structural engineers, geotechnical engineers, and quantity surveyors to build an evidence-based case for the true cost of repair or replacement. He has acted for homeowners in claims arising from the Canterbury earthquakes, Auckland Anniversary Floods, and Cyclone Gabrielle.

Q: What is Toka Tu Ake / NHC and how does it work?

From 1 July 2024, the Earthquake Commission (EQC) was renamed Toka Tu Ake — Natural Hazards Commission (NHC) under the Natural Hazards Insurance Act 2023, which replaced the old Earthquake Commission Act 1993. The statutory insurance scheme is now called NHCover.

For natural hazard events occurring from 1 July 2024, NHCover covers residential buildings up to $300,000 plus GST. If damage exceeds this cap, the balance passes to your private insurer. For events before 1 July 2024, the old EQC rules and cap amounts continue to apply.

Q: The NHC has capped my claim and handed it to my private insurer. What happens next?

When the NHCover cap is exceeded, the claim passes to your private insurer for the balance. Disputes can arise at this interface — particularly where there is disagreement about the scope or value of damage, or whether particular damage is covered by NHCover, your insurer, or neither. Tim assists homeowners in navigating this process, challenging decisions, and ensuring the full extent of their loss is properly assessed.

Q: Can I challenge my insurer's repair methodology?

Yes. Insurers sometimes propose a repair methodology that is technically deficient, underscoped, or that fails to properly reinstate the property.

In a Property Damage claim as with any insurance claim, the onus of proof rests with the policyholder. Therefore, it is your responsibility to prove that that there is damage that is covered by the policy and how much it will cost to remedy that damage. This means taking an active role in gathering and organising expert evidence to support your claim.

Tim works alongside engineering and construction experts to identify and challenge deficient repair proposals, and has successfully achieved substantial increased settlements for clients in this situation.

Costs & Process

Q: How much does it cost to dispute an insurance claim with Tim Gunn?

Tim offers a no-obligation initial discussion at no charge.

For insurance review cases, Tim offers a no-obligation initial discussion at no charge, followed by a fixed-fee initial consultation of $750 plus GST, which includes a review of your claim, the reasons for the declinature and providing initial advice. There is then an option of a further fixed fee of $1,500 plus GST for a formal letter of challenge, suitable for use in either internal dispute resolution (IDR) or with the IFSO

For all other litigation matters, Tim charges an hourly rate set out in his Terms of Engagement, and provides clear advice on expected costs and strategy at every stage.

Q: Can I use the Insurance & Financial Services Ombudsman instead of a lawyer?

Yes, the IFSO scheme is a free external dispute resolution service available to policyholders in NZ for disputes up to $500,000 plus GST (this limit increased on 18 July 2024). It is a good option for straightforward disputes. However, for complex claims or high-value matters legal representation can assist in achieving significantly better outcomes. Tim can advise whether the IFSO route or direct legal action is the better strategy for your situation — and can prepare a formal letter of challenge for a fixed fee of $1,500 plus GST if the IFSO route is appropriate.