Minister announces 'common sense' changes to EQC Act

The Minister responsible for the Earthquake Commission, Megan Woods has announced changes to the Earthquake Commission (EQC) scheme that will simplify and speed up the claims process.

According to Woods, the Cabinet carefully considered the proposals regarding changes to the EQC Act, which aims to improve how the Act functions and enable the scheme to work more effectively for future natural disasters.

“These are widely agreed, common sense changes that can be made before the independent inquiry into EQC. I’ve asked for them to be brought forward so that, if the worst did happen and we had a major event shortly, these changes will have been made,” she said.

The changes will also resolve issues with the EQC Act that have previously been identified by the Ombudsman and the Canterbury Earthquakes Royal Commission.

Woods outlined the changes, which include:

• Increasing the cap limit on EQC residential building cover to $150,000 (plus GST);
• Enabling EQC to accept claim notifications for up to two years after a natural disaster, rather than the current three-month time limit for such notifications;
• Removing EQC insurance cover for contents;
• Clarifying EQC’s authority to share information to support the implementation of the EQC Act and settlement of insurance claims and where this is in the public interest and safety (A recommendation of the Canterbury Earthquakes Royal Commission).

The Minister said that removing cover for contents will increase EQC’s ability to allocate more resources when responding to a natural disaster and help reduce any delays in resolving residential building and land damage claims.

“Government has talked to the insurers and the indication is that private insurance cover for contents will continue to be available at a reasonable cost,” she noted.

The removal of cover for content and the increase to the cap limit for EQC residential building cover will come into effect on July 1, 2019. Ministers have discussed this timing with Treasury, EQC and the Insurance Council of New Zealand (ICNZ).

“These are changes that can be made now without having to wait for the outcome of the upcoming inquiry,” Woods added.

All of the proposed changes are still be subject to the New Zealand legislative process with the passage of the legislation expected by the end of December.