What is EQC Cover?
The initio house, rental and holiday home insurance policies provide automatic cover for earthquake damage, with assistance from the EQC.
The Earthquake Commission (EQC) is a Government insurer designed to provide insurance for residential houses when there is a natural disaster. The EQC does not provide insurance for damage from flooding or storm events, only earthquakes and volcanic activity. Part of a house’s total insurance premium (currently $276 inc gst) goes to the EQC to provide up to $100,000 + gst of natural disaster insurance.
If the natural disaster causes more than $115,000 of damage, rest assured that initio will pay for the rest (up to the amount you have insured the property for).
The EQC also provides cover losses to land. Its important to note that if you don’t have insurance cover on your property then you will not receive the benefit of EQC cover. Learn more about the EQC.
When the EQC cover changing?
from 1 July 2019. This means that the first time your policy renews after 1 July 2019 the new EQC cover will apply to your property. For a new policy with initio, if the cover is started after 1 July 2019 the new EQC cover will apply.
How is EQC cover changing for houses?
The residential building EQC cover cap is increasing from $100,000+ gst to $150,000 + gst per dwelling.
This means that the cost will increase as follows (inc gst):
Rental property: levy increasing from $276 to $345
Holiday home: levy increasing from $276 to $345
Multi unit rental property: per unit levy increase from $276 to $345
Owner occupied home: levy increasing from $230 to $345
In short, the EQC dwelling cover is increasing but so is the levy.
How is EQC cover changing for personal contents?
The EQC will no longer provide cover for personal contents.
As such the cover is reducing from $20,000 to $0, and the levy is reducing from $40 to $0
In short, the personal property EQC cover is being removed, but so too is the levy.
What does this mean if my house is completely destroyed in an Earthquake?
If you have insurance you will have EQC cover. If your house is a total loss, and is insured for more than $150,000 + gst both the EQC and initio (backed by IAG New Zealand Ltd) will be paying to put you right.
For example if your house is insured for $450,000 inc gst, and is deemed to be a total loss, the EQC will contribute $172,500 inc gst to the rebuild of the house, and initio will top up the remaining $277,500 inc gst.
In this situation you will lodge a claim with Initio and the EQC. Initio and the EQC will work together to manage the rebuild or settlement.
What about when the Earthquake damage is minor
If the earthquake damage is less than $150,000 + gst the EQC will run the claim and pay for your damage. As the damage is under the EQC cap the insurance cover is not triggered.
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