As you will have heard in the news since February, the Earthquake Commission Act 1993 was amended with changes coming into force 1 July 2019.
Why the Changes
The changes are intended to broaden how Earthquake Commissions can apply the Act by providing homeowners more time to lodge a claim and increasing the cap limit on each claim. Below is a brief extract on those changes from their website:
Four changes to the EQC Act
There are four key changes to the law:
1. An immediate extension of the time-frame for lodging a claim from three months to two years.
2. Further scope for the EQC to share property-related information as necessary to settle insurance claims.
3. Removal of the $20,000 EQCover for contents from 1 July 2019.
4. An increase in the cap on EQC residential building cover to $150,000 from 1 July 2019.
What you need to know
Changes to contents cover and the increase in the residential building cap will be phased-in over 12 months from July 2019 as existing insurance policies are renewed or replaced.
Under the changes, EQC will continue to insure residential buildings and land, although EQC will no longer provide cover for contents.
The EQC Act has been under review since 2012 as successive governments have considered changes to natural disaster insurance arrangements and the management of risk and recovery in New Zealand.
What Changes affect you?
The main change that affects insured clients is the recalculation of the “EQC Levy".
Below is a breakdown of how the levy change may affect you:
• Currently capped at $100,000, the EQCover amount will increase to $150,000 + GST, with the rate remaining at 20c per $100 insured.
• The Earthquake Commission will no longer cover contents under EQCover. You should only see the Fire Emergency Levy on your contents policy from July onwards
• This is also extended to cover any levies associated with Landlord’s Chattels under your home policy. Where you would normally see an EQC levy for both home and chattels, you will only see a levy as reflected above under ‘Residential Home’
The only other change you will notice is there should no longer be any mentioned of Earthquake Commission and/or EQCover under the schedule for your Contents.