What is Earthquake Commission (EQC) cover?
EQC cover is a type of government-provided insurance that helps with the cost of repairing or replacing residential homes that are damaged by:
- Earthquake
- Tsunami
- Landslip
- Volcanic eruption
- Hydrothermal activity
The EQC is a government agency that operates under the Earthquake Commission Act 1993, and you receive the EQC cover automatically when you purchase a house insurance policy. If a natural disaster damages your home, EQC will help to pay for the cost and your home insurer, such as initio, will pay the rest up to your selected sum insured.
IMPORTANT CHANGES (October 2022):
Changes to EQC natural disaster cover:
From 1 October all New Zealand homeowners will be affected by the Government’s EQC changes:
- EQC cover increase:
The cap is doubling from $172,500 inc gst to $345,000 inc gst. This cover is provided as part of your home insurance with us. We pay when the natural disaster damage exceeds this cap. - EQC levy increase
The relevant levy is increasing from $345 inc gst per year to $552. Your home insurance spend includes an EQC levy that is collected on behalf of the EQC. - EQC changes affect everyone
All insured New Zealand homeowners (regardless of their insurer) will be affected by this change when starting or renewing a house insurance policy.
How does EQC cover work?
Part of your total home insurance cost goes to the EQC as a levy. We collect this levy and pass it on to the EQC. This money is then pooled together by the EQC to create a sort of war chest in case our fellow Kiwi’s need help following a disaster. The EQC also uses some of this money to buy additional cover (known as re-insurance) in case of a major catastrophe affecting an entire region.
What cover do I get?
For home policies starting or renewing on or after 1 October 2022, you receive up to $345,000 inc gst of cover per dwelling unit. This is a doubling of the cover provided from a previous cap of $172,500.
How much does the levy cost me?
It depends on your sum insured but for the vast majority of homeowners with policies starting or renewing on or after 1 October 2022, the annual cost is $552 inc gst ($46 per month). This is an increase of $207 compared to policies that started prior to October 2022.
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 EQC levy.
Does the EQC 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.
Am I covered for damage to land?
Yes, the EQC provides cover for land. There are certain conditions for coverage and a special land excess applies. See the EQC’s page on residential land cover.