Who pays if you change insurer on the same day as a quake?

The 2010 earthquake caused widespread damage to Canterbury. / file photo.

A Christchurch building owner changed insurer on the same day a magnitude 7.1 earthquake struck the Garden City in 2010 and caused widespread property damage.

The unbelievable timing of the insurance switch and the question of who pays has played out in court between two big corporates, QBE Insurance and Allianz Australia.

The earthquake struck at 4:35am on September 4, some 11 hours before a QBE insurance policy over a commercial property was due to expire.

The tremors caused significant damage to the property but due to an unspecific policy start time with the new insurer, Allianz, the payout provider was debatable.

A month prior to the natural disaster, QBE advised the insurance broker acting for the building that it did not want to renew the policy. The broker then organised new cover with Allianz Australia.

The policy schedule provided by Allianz stated that the cover would be effective from September 4 2010, without a specific time.

QBE insurance accepted it was liable for the damage under its policy but sought a 50 per cent contribution from Allianz Australia on the grounds that as of 4.35 am on September 4 2010, the property was insured by both companies.

Allianz Australia disputed this and the issue proceeded to the High Court.

Justice Whata earlier ruled Allianz was not liable for the claim as he interpreted its policy commenced at 4pm.

"He held that [view] having regard to the factual matrix, those words should be interpreted to mean that the policy did not incept until 4 pm on 4 September 2010," the judgment stated.

QBE challenged that decision but it was dismissed by the Court of Appeal today.

QBE was ordered to pay costs.