A state-owner earthquake insurer still has to pay out a Christchurch couple, after their lawyer says they were purposefully deceived.

Southern Response has lost its bid to overturn last year's High Court decision against it.

The court found the agency misled and deceived Karl and Alison Dodds, by keeping secret a higher estimate to rebuild their quake-damaged home.

Dodds family lawyer Peter Woods told Mike Hosking it was straight up subterfuge.

He says it wasn't malicious, but the Dodds relied on the information Southern Response gave them, so they're entitled to receive damages.

Woods says claim misrepresentations made to thousands of other homeowners could cost the agency up to $675-million.

"The case sets a legal precedent that could have a big impact.

“There's an upcoming class action suit with 3000 claims in it - and the Court of Appeal's made it clear Southern Response is liable for this one."

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