In 2008 Jim*, arranged material damage and business interruption insurance for his motel.
Jim’s motel included 20 car parks, which he leased out to employees of a nearby business. Both Jim’s motel and the nearby business were damaged during the Canterbury earthquakes in 2011, but the car parks were not damaged.
The nearby business relocated, and its employees no longer leased the carparks.
Jim made a claim for damage to the motel, and loss of income from the carparks. While the insurer accepted the claim for damage to the motel, which was covered under the policy, it declined the claim for loss of income from the carparks, as it fell outside the scope of cover. The loss was not caused by earthquake damage to the carpark, but by the business relocating. The IFSO Scheme agreed it was outside the scope of cover.
Complaint not upheld.
*Names have been changed.