The Insurance Council of New Zealand (
ICNZ) has given its backing to a review of the Earthquake Commission Act but seeks clarity on some issues.
Finance minister Steven Joyce said that the review of the
EQC Act means the scheme will work better when dealing with future natural disasters.
“Everyone with a private insurance policy, that includes fire insurance for their residential building, will continue to receive EQC cover,” Joyce said, noting that “EQC has provided huge support to New Zealanders following the Christchurch, Seddon, and Kaikōura earthquakes”.
Responding to the announcement, the CEO of ICNZ
Tim Grafton said that the reforms were a good step towards providing a better scheme for New Zealanders, especially the increase of the EQC building cover to $150,000 (+GST) from $100,000 (+GST).
He also welcomed the government’s clarification that EQC land cover is for natural disaster damage that directly affects the insured residence or access to it.
“This means that where land damage has occurred, separate funding to the building cover is available to fix the land or access to the property, so the house can be repaired or rebuilt. Without these two separate sources of funding, there was a real risk in a city like Wellington, where there are many hillside properties that are likely to suffer land damage in a major earthquake, that people would not be able insure themselves adequately,” Grafton said.
The changes also mean a standardised $1000 claims excess on EQC buildings cover; and contents cover is to end, something the Insurance Council chief welcomes.
“The focus of the scheme should be on ensuring people can be rehoused after an earthquake, so private insurers will meet all contents claims, and having a standard excess helps simplify the claims process,” he said.
Among areas for which the ICNZ will seek clarification are that private insurers will assess and manage all claims as they did for Kaikōura to avoid delays and other issues seen after Canterbury.
“Another issue we are keen to push is that the standard of repair that homeowners receive is the same as that of their insurance policies irrespective of whether the damage is above or below the EQC cap,” Grafton said, adding that there would be further technical discussion with officials with a view to have legislation in place shortly after the election.
Related stories:
Proposed reforms to the EQC Act revealed
Kiwis urged to lodge EQC claims
