What is Natural Hazards Commission (NHC) cover?
If you insure your home with initio, part of what you pay includes a compulsory levy for Natural Hazards Insurance. This levy gives you access to cover provided by the Natural Hazards Commission Toka Tū Ake (NHC), previously known as the Earthquake Commission (EQC). It sits underneath your initio policy and covers specific parts of your land and home when they are damaged by natural disasters.
NHC cover is a type of government-provided insurance that operates under the Natural Hazards Insurance Act 2023 to help with the cost of repairing or replacing your residential home and specific parts of your land that are damaged by:
- Earthquake
- Tsunami
- Landslip
- Volcanic eruption
- Hydrothermal activity
- Storm or flood (land only)
You receive the NHC cover automatically when you purchase a house insurance policy. If a natural disaster damages your home, NHC will help to pay for the cost and your home insurer, such as initio, will pay the rest up to your selected sum insured (within the terms of your policy).
What Natural Hazards cover is provided by NHC for your home?
- Cover for your home or holiday home, plus related outbuildings such as a shed, garage or pergola.
- Essential services connected to your home (for example water, drainage, sewerage, gas, electricity or telecommunications) up to 60 metres from the home.
The maximum amount the NHC will pay towards repairing or rebuilding a home for a covered event is $300,000 plus GST for events on or after the 1 October 2022. If the damage relates to an event prior, the cap may be lower. The limit is per insured dwelling unit.
Anything above that cap is covered by your private insurer through your home policy.
Although your initio policy pays for the top up cover on your home, it’s important to know that initio cannot top up or extend any land cover beyond what the NHC provides. The amount paid by the NHC is the full entitlement for land under the Natural Hazards Insurance Act, and insurers are not able to offer additional land cover above this cap.
This means that if the cost to repair or stabilise the land is higher than the NHC settlement, initio is unable to pay the difference. Your initio policy will continue to respond to damage to your home and other insured buildings, but any extra cost relating purely to land sits outside the policy and cannot be covered.
What Natural Hazards cover is provided by NHC for your land?
Under the NHC, you are insured for the land that is inside your legal property boundaries AND;
- under your home and some related outbuildings
- within 8 metres of your home and select outbuildings
- under or supporting your main accessway for up to 60 metres (for example, the land under your driveway)
New Zealand is one of the only countries where homeowners have access to residential land cover. But it’s important to understand that this cover is limited and does not extend to all parts of your section.
Your land cover is based on a land cover cap, made up of:
- the market value of your insured, damaged land
- the value of insured retaining walls, bridges and culverts (to a limit)
If it costs more to repair the land than it is worth, the NHC will cash settle based on the land’s market value at the time of damage.
This means Natural Hazards Insurance usually contributes toward repairs rather than fully covering them.
What if my property has a Section 72 or Section 51 Notice?
Section notices are warnings placed on a property’s title that inform current and future owners, insurers and lenders about known or newly identified natural hazard risks. They affect how claims under the NHC’s natural hazards cover are assessed. There are two main types:
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Section 72 notices (under the Building Act 2004).
- A Section 72 notice may be placed when a building consent is granted for land that has a known hazard (erosion, slippage, inundation etc).
- If you later make a claim for damage caused by the hazard listed in that notice, the NHC may fully or partly decline your claim.
- If the damage is caused by a different hazard than the one specified in the notice, the normal natural hazards claims process applies.
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Section 28 or 51 notices (which limit or cancel cover after a claim settlement)
- These notices apply when the NHC limits or cancels natural hazards cover after a previous claim, for example if repairs haven’t been made or the hazard risk remains unaddressed.
- Once a notice is placed, cover is limited or cancelled from the date of notification — and stays on the title until the homeowner provides sufficient proof of repair or risk mitigation.
- If the cover is cancelled, future natural hazards claims may not be accepted for that property.
Section notices are important because they can affect your insurance cover under NHC policies and influence how your private insurer treats your claim. For homeowners, it means full disclosure of any known hazards or title notices is vital — failure to do so may lead to claim difficulties. Repairing or mitigating hazard risks after a claim is critical to avoid a Section 28/51 notice limiting future cover.
How much does the levy cost me?
It depends on your sum insured but for the vast majority of homeowners, the annual cost is $552 incl gst ($46 per month).
If you have a home or unit with lower sum insured the levy increase will not be as much, and you may even see a reduction in NHC levy.
Does the NHC levy change by region?
No, it’s a flat charge regardless of where your home is. So Auckland homeowners pay the same as Wellington homeowners. The cover and the levy does not take account of regional natural disaster risk.
For further information regarding NHC cover please refer to the Natural Hazards Commission Toka Tū Ake (NHC) site.
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