Significant changes to residential property insurance for earthquakes and natural hazards are now in force…

On 1 July 2024, the Natural Hazards Insurance Act 2023 came into force. This new Act replaces the Earthquake Commission Act 1993 to modernise and simplify the process for residential property claims after natural hazard events (earthquakes, tsunami, landslides, floods, volcanic activity, and geothermal activity).

The Earthquake Commission Toka Tū Ake providing ‘EQCover’ is now known as the Natural Hazards Commission Toka Tū Ake which provides ‘NHCover’.

NHCover will apply to all insurance claims for damage occurring on or after 1 July 2024. Claims before this date will be assessed by EQCover.

The maximum amount that can be paid out for a building claim (building cover cap) remains at $300,000.

NHCover places a cap on land claims. There is a cap of $50,000 plus GST for all retaining walls, and $25,000 plus GST for all bridges and culverts. There is no land cover cap under EQCover.

The list of covered essential services under NHCover now includes heating, in addition to the other covered services including water supply, drainage, sewerage, gas, electricity, and telecommunications.

While EQCover only covers retaining walls, bridges, and culverts within a property’s boundary, NHCover will cover retaining walls, bridges, and culverts outside a property's boundary if the homeowner has an insurable interest in the structure.

NHCover introduces a flat excess rate of $500 per insured home for building and land claims. Where a building has more than 10 insured homes, the maximum excess for a land claim is $5,000.

A Code of Insured Persons’ Rights has also been introduced which sets out the standard of service claimants can expect under NHCover. Claimants have the right to:

1. Be treated with dignity and respect
2. Effective communication
3. Be fully informed
4. Know expected timeframes
5. Have their personal information protected and respected
6. Support
7. Have their culture, values and beliefs respected
8. Complain to the Natural Hazards Commission Toka Tū Ake where they think the Code has been breached
9. Have a decision made about a breach of this Code independently reviewed by an external party
10. efer a dispute about a referable decision to the external dispute resolution scheme.

The external dispute resolution scheme set up under NHCover is free of charge, and includes mediation and adjudication.

Hopefully it will be a while before we see claims from new natural hazards/disasters but those claims will be under the new processes going forward. The old processes will continue until the pre-July 2024 claims are completed.

If you have problems with natural hazards issues, it pays to seek advice from a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.