The Minister responsible for the Seismic Commission, Dr David Clark today announced that the government will increase the amount of insurance risk borne by the Seismic Commission (EQC), advancing a new recommendation from the public inquiry of Dame Silvia Cartwright of 2018 on the crown entity.
“COVID has shown us how important it is to have the right support in a disaster. We want New Zealanders to have access to affordable home insurance, to ensure that as many people as possible can repair their homes if they are damaged by a natural disaster, ”said David Clark.
Effective October 1, 2022, EQC will cover the first $ 300,000 of damage caused by earthquakes, tsunamis, volcanic eruptions, hydrothermal activity and natural landslides. Private insurers cover damage exceeding the EQC limit, which is currently set at $ 150,000.
“We are offering more natural disaster coverage to homeowners, ensuring their private insurance coverage remains available and affordable,” said David Clark.
“In recent years, insurers have moved to risk-based pricing for earthquakes, making the cost of insurance higher for homeowners in areas like Wellington, Hawke’s Bay and Canterbury. The increase in the EQC cap is expected to result in lower premiums for many New Zealanders as the Crown absorbs some of the liability and risk from private insurers.
“This change means the government, through EQC, will take more of the risk – I would expect insurers to reflect this in their pricing for residential property insurance bought by New Zealanders.” after October 2022.
“The intention of the inquiry, which was led by Dame Silvia Cartwright, was to examine the role and work of the commission in the wake of the recent natural disasters dating back to the Canterbury earthquake in 2011.
“New Zealand has one of the highest levels of residential property insurance in the world and we want that to continue. We have known since the Canterbury earthquake how important insurance is in helping communities get back on their feet, ”said David Clark.
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