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In the line of fire

UFO Limited’s building suffered extensive damage during the Christchurch earthquake.

UFO Limited’s insurer agreed to cover the cost of repairs to the building.

However, in order to start the repairs, a building consent was required. And in order to obtain the building consent, the fire protection system was required to be upgraded to meet minimum council standards.

The insurer said that, as the existing fire protection system was not damaged, it was not required to pay for the upgrade.

UFO Limited challenged the decision

UFO Limited presented the insurer with information relating to minimum upgrade standards of buildings, and argued that these types of upgrades should be paid for by insurance companies as part of the repairs for earthquake damage and building consent requirements.

The requirement for the upgrade was a result of the repairs.

Insurer’s view

The insurer noted that the fire protection system was not damaged. The fire protection system only need to be upgraded to comply with consent requirements, and that fell outside the policy.

UFO Limited did not accept the insurer’s view and complained to FSCL.


The first stage of our process when the complaint is “deadlocked” is to send a letter to our scheme participant requesting their response to the complaint, and full disclosure of their file relating to the complaint.

We allow the participant 10 working days to respond.

Insurer’s response

On the 9th working day, the insurer advised us that the original decision to deny the claim had been overturned, and it would, on a without prejudice basis, indemnify UFO Limited for the fire protection system upgrade that was required by the council.

The complaint was therefore quickly resolved.

Key insight

FSCL’s process offers the consumer the opportunity to have their issue reviewed, and the financial service provider the opportunity to review their own decision.

A financial service provider will have internal review processes within their business so that a complaint is reviewed by either a board, or a group of appointed persons, when it has been notified by FSCL.

FSCL will, in some instances, not be required to investigate as the financial service provider will reach a decision favourable to the complainant before being required to provide FSCL with its report.