A review of the Earthquake Commission (
EQC) Act could see the implementation of a number of reforms aimed at simplifying and improving the scheme for New Zealanders.
Following a review of the Act, a number of proposed changes have been announced, including raising the amount of natural disaster cover from $100,000 per claim to $150,000; standardising claim excess, from the current range of $200 and $1,150 per claim, to $1,000; and dropping contents insurance.
EQC minister Gerry Brownlee said the proposed changes would not affect existing claims.
Claimants would be required to lodge their claims with their private insurer, which would act as EQC’s agent - so there would be no need to deal with both organisations. This approach was temporarily adopted after the November 2016 earthquakes in accordance to a memorandum of understanding signed by both parties last year, Fairfax Media said.
The review also clarified that EQC would only cover natural disaster damage that had direct impact to the insured residence or access to it; and that total land cover would be provided in “total loss” situations where repair or rebuild to a site was not possible, the report said.
Insurance Council of New Zealand (
ICNZ) chief executive
Tim Grafton expressed support for the proposed reforms, but wants a clear expectation that insurers “should be responsible for assessing and settling all house claims.”
The ICNZ boss said he wanted to avoid a situation where EQC had to assess and manage claims that were lodged to insurers.
“We would seek clear direction from the Government to EQC that insurers should be responsible for assessing and managing claims broadly based on the Kaikoura model,” he said.
“This will ensure we avoid the situation that occurred in Canterbury where insurers are advised by EQC some years later that the building cap has been breached, and that they should now manage the claim.”
With regards to the proposed scrapping of contents insurance, Grafton said it “made sense” since EQC should be focused on “ensuring people can be rehoused after an earthquake.”
A draft bill of the EQC Act reforms is hoped to be released later this year or early next year, with the changes, if implemented, to take effect in 2020.
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