sign up Your signup was successful Subscribing..


< back

New Hazards Insurance Law Set to Make a Splash

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.


Forward to a friend

Leave a comment