EQC provides cover for earthquake claims under the Earthquake Commission Act 1993 (“the Act”). Key provisions are section 18 (residential buildings), section 19 (residential land) and section 20 (personal property i.e. contents). Under the Act, claims must be reported to EQC within 90 days of the occurrence of any natural disaster damage.
Generally, private insurers provide top up cover for both damage to houses and damage to contents. In most cases, top up cover will only be triggered where damage to a residential dwelling exceeds $100,000 plus GST or damage to contents exceeds $20,000 plus GST. Ironically, there is no time limit for reporting claims to private insurers. However, given that EQC processes earthquake claims in the first instance and does not transfer claims to private insurers until EQC considers that it has settled all of its obligations under the Earthquake Commission Act, the insurance policy tends to sit behind EQC cover and the processes adopted by EQC.
Claimants making earthquake claims should quickly familiarise themselves with the provisions of the Act, the Earthquake Regulations 1993 and any related orders in council. When making a claim to EQC, claimants should also notify their private insurers. Recent media statements suggest that in some instances, private insurers will assist homeowners to deal with EQC. In addition, it is prudent for claimants to keep their private insurer informed that an EQC claim has been lodged which could potentially be transferred to a private insurer at some future date. Claimants should also request copies of the relevant policy wording and schedule from their private insurers as these documents contain vitally important information.
There is no private insurance cover for land claims. These claims are solely the domain of EQC. Under the Act, EQC is required to pay its customers the value of the area of land that is actually lost or damaged and the indemnity value of bridges, culverts and retaining walls. Compensation may also be payable where land is more vulnerable to flooding and/or liquefaction as a direct result of an earthquake. These claims are referred to as IFV and ILV claims.
We encourage claimants to make all claims required to EQC promptly and to record any communications they have with EQC for future reference. Claims which are not lodged within 3 months are unlikely to be accepted. This could result in no cover under either the Act or the insurance policy. Therefore, it is vitally important that claims are lodged by the due date and that claimants receive formal acknowledgement from EQC that claims have been received by the due date.
For further information or advice related to earthquake matters please contact one of our team of expert insurance lawyers specialising with expertise in earthquake claims;
Richard Caughley by email richard.caughley@morrisonkent.com or (04) 4958903,
Michael Wolff by email michael.wolff@morrisonkent.com or (04) 495 8919.