By Darius Shahtahmasebi - 11 Sep 2023
2023 has been a watershed year for severe weather events -
fortunately there is a change on the way that should help
homeowners and building owners make an insurance claim. The
infamous Earthquake Commission Act 1993 ( EQC
Act) is facing an overhaul, now set to be replaced
by the Natural Hazards Insurance Act which comes into effect from 1
July 2024.
The Act's key changes include:
- Changing the name of the Earthquake Commission
(EQC) to Toka Tū Ake, or the Natural Hazards
Commission;
- The 'cap' on residential buildings will increase from $150,000
(plus GST) per dwelling (per event) to $300,000 (plus GST);
- The definition of 'natural disaster' has been widened to
include landslides, subsidence and storm surges;
- The new Act provides rules for making multiple insurance claims
on mixed or multi-use buildings, and includes greater clarity
around relief for damaged retaining walls, bridges and culverts
(which now have caps);
- The Act clarifies that the standard of cover for buildings is
on a 'replacement cost basis' which is further clarified in the
provisions of the Act. Previously, the standard of cover was known
as 'replacement value'.
- The Act also provides further clarity in respect of 'land'
claims which is to be measured by 'the actual loss' suffered. Any
land claim is however capped at the market value of the land.
The new rules also see the establishment of an independent
tribunal to assist with dispute resolution (New Zealand Claims
Resolution Service). This tribunal has been modelled off the
Greater Christchurch Claims Resolution Services (GCCRS) and
Residential Advisory Service (RAS), both used to resolve disputes
following the Canterbury earthquake sequence.
The dual nature of New Zealand's natural disaster insurance
scheme, in which the government is responsible for the first line
of insurance and the private insurer is responsible for top-up
cover, is relatively unique to New Zealand.
While the new law intends to make navigating this unique system
easier for homeowners and businesses, expert representation will
still likely be required to assist navigating these insurance
contracts.
At Martelli McKegg, our personnel have direct experience in
dealing with the GCCRS, which is the blueprint for the newly
established New Zealand Claims Resolution Service. Our personnel
also have experience appearing before the Canterbury Earthquakes
Insurance Tribunal (CEIT), representing clients against the EQC and
private insurers; as well as navigating the EQC Act, insurance
contracts and expert engineering reports.
If you require expert legal advice in respect of a claim
regarding your property or land, contact Darius
Shahtahmasebi.