In February 2019, the Earthquake Commission (EQC) Act changed.
The Act changes are relevant to all New Zealanders who have a current private insurance policy for their home that includes fire insurance.
The changes broaden how EQC can apply the Act by providing homeowners more time to lodge a claim and increasing the cap limit on each claim.
They also enable EQC to deliver an improved customer experience by providing more scope and clarification on sharing claim information.
They’re part of an overall push to put in place the lessons learned from the Canterbury earthquakes and other events and issues identified by the Ombudsman, Office of the Auditor-General and the Canterbury Earthquakes Royal Commission.
We have been working on many ways to improve our claim management processes and customer experience – and these changes to the law will help.
Understanding the changes and what they mean for customers is also important.
Four changes to the EQC Act
There are four key changes to the law:
- An immediate extension of the timeframe for lodging a claim from three months to two years.
- Further scope for the EQC to share property-related information as necessary to settle insurance claims.
- Removal of the $20,000 EQ Cover for contents from 1 July 2019.
- An increase in the cap on EQC residential building cover to $150,000 from 1 July 2019.
What you need to know
Changes to contents cover and the increase in the residential building cap will be phased-in over 12 months from July 2019 as existing insurance policies are renewed or replaced.
Under the changes, EQC will continue to insure residential buildings and land, although EQC will no longer provide cover for contents.
The EQC Act has been under review since 2012 as successive governments have considered changes to natural disaster insurance arrangements and the management of risk and recovery in New Zealand.
Questions and answers
What insurance cover is provided by EQC to the general public?
Under section 18 of the Act, residential buildings with a contract of fire insurance are insured under EQCover. EQCover insures against physical loss or damage occurring as the direct result of a natural disaster.
The Act lists natural disasters as:
- an earthquake, natural landslip, volcanic eruption, hydrothermal activity or tsunami
- natural disaster fire, which is caused by a natural disaster
- or, in the case only of residential land, a storm or flood.
What else is covered by EQC?
From 1 July, 2019, personal property is no longer part of EQCover. However, residential land is still covered by EQCover, though it’s limited to land within the property boundary.
- land under the residential building and appurtenant structures
- land within eight metres of a residential building and structures
- land under or supporting main access ways from the boundary up to 60 metres from the house (but not the driveway surfacing).
EQCover also provides some cover for bridges, culverts and retaining walls.
More information about what EQC covers is available on the EQC insurance page.
What changed in February 2019?
From February 2019, the timeframe for lodging an EQC claim was extended and EQC’s scope to share property-related information was broadened.
How do the February changes affect policy holders?
The timeframe to lodge a claim has been extended from three months to up to two years.
However, a claim lodged more than three months after an event may be declined if a delay in lodging the claim affects EQC’s ability to attribute the damage to the disaster event. We’re encouraging all claimants to lodge their claims within three months, wherever possible.
In addition, EQC now has more scope to share information about residential property claims. The Act defines property-related information as information about natural disaster damage to a residential property (dwelling and land) and any claims made under the Earthquake Commission Act.
It also covers information about the assessed cost of replacing or reinstating damaged property, what repair work has been carried out and settlement amounts.
Anyone can make a request for information about claims lodged with us, including previous claims. But, keep in mind that sharing claim information related to residential properties is different to EQC sharing someone’s personal information such as their contact details.
EQC is still bound by the provisions and protections under the Privacy Act, and to balance this requirement against the equal need to attend to the public interest.
What changes in July 2019?
From 1 July, the cap on EQC residential building cover is increasing and EQC will no longer offer household contents cover.
How do the July changes affect policy holders?
From 1 July 2019, EQCover increases for residential buildings from $100,000 (+ GST) to $150,000 (+ GST). Depending on their policy, policy holders are affected on the anniversary date of their existing policy.
Also from 1 July, 2019, EQC will no longer cover contents, affecting policy holders on the anniversary date of their existing policy.
Is the EQC levy changing?
Increasing the residential building cap by $100,000 to $150,000 (+ GST) and removing the $20,000 contents cover means that the maximum EQC premium increases from $276 (including GST) to $345 (including GST) per annum reflecting the additional risk being covered by EQC.