A $745,000 insurance claim was denied after a commercial property owner lied about the circumstances in which weather damage was first discovered.
Polladio Holdings Ltd owns the Grosvenor Hotel in Timaru. Director Ping Lim claimed on a New India insurance policy for hail damage to the roof. A hail storm passed over Timaru in November 2019. It was not until September 2020 that a claim was made.
New India queried the delay. Mr Ping said he was not aware of the damage until the roof was inspected one year later, prior to planned renovations. It came out in evidence at the High Court that Mr Ping was aware of hail damage back in November 2019 when contractors made temporary repairs to the roof.
New India’s policy invalidates claims made dishonestly and further requires that ‘true statements’ are made when claiming. Justice Wylie ruled Mr Ping’s false statement about when the damage was discovered, by itself, was sufficient ground for New India to refuse payment.
Changes to insurance law in 1977 prohibited insurance companies from denying cover on the sole ground of delay in making a claim. The amount paid out can be adjusted if any delay increases costs for the insurer. For Polladio Holdings, the justification for non-payment was not the delay in reporting damage, but the fact of lying about the delay.
Separately, Justice Wylie ruled there were two further grounds for New India to refuse payment. A policy exclusion for damage caused by ‘marring and scratching’ was sufficient to deny payment; cosmetic pitting and scratching to the roof caused by hail damage fell within this exclusion. Where severity of the hail storm had punched holes in the roof, this was due to rust and corrosion in the roofing material, again an excluded condition.
Polladio Holdings Ltd v. New India Assurance Co Ltd – High Court (12.05.23)
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