Canterbury earthquake building claims

Why you would reopen your claim

There are several reasons why you might request a review of your building claim.  
You might be concerned that: 

• the settlement did not include all earthquake damage 
• the repair work or repair strategy hasn’t, or won’t, repair the earthquake damage to the standard required by the EQC Act
• the cash settlement wasn’t, or isn’t, sufficient to meet the reasonable costs of undertaking the repair strategy.  

The settlement process for reopened claims

Once your property has been assessed, we’ll review the information you provide to determine what can be covered under the EQC Act. As part of this process, we will likely visit your home to verify the damage outlined in the information you’ve provided.

If we accept that your property has earthquake damage and the proposed repair costs are fair and reasonable, we’ll confirm this in writing to you.

If your natural disaster damage does not involve any structural repairs, we’ll advise you in writing to proceed with your repair. Once we receive evidence of completed repairs, along with any invoices or producer statements from your contractors, we’ll pay you (or your mortgagee) within seven working days.

If you discover further damage after the work has begun, please contact the person managing your claim. If the additional damage was caused by an earthquake or needs to be reinstated as part of the earthquake repairs in accordance with the EQC Act, we’ll confirm the extent of additional costs we may cover in writing.

An excess applies to EQCover (now NHCover) residential building claims and is calculated at 1% of the maximum amount payable, including GST. The person managing your claim will be able to provide more detail about your excess requirements.

If the damage is from more than one event

The multiple large-scale earthquakes and aftershocks in Christchurch are unique in world insurance history.  

Because of the complexity of the Canterbury earthquake sequence, a 2011 High Court ruling was necessary to decide how to handle multiple insurance claims. The ruling declared that natural hazards cover renews after each event as long as the property remains insured.  

If your home suffered damage in more than one earthquake event, we need to determine how much damage was caused by each individual quake, and whether subsequent quakes changed the required repair strategy. This process is called apportionment. 

Because cover begins again after each event, we must determine when the damage occurred so we can work out which costs may be covered under the EQC Act. 

There is a limit to EQCover for each event

During the period of the Canterbury earthquakes, Natural Hazards Commission Toka Tū Ake (formerly EQC Toka Tū Ake) covered earthquake-related damages up to $100,000 plus GST per claim.  

The EQCover cap that applies to your property is shown in the insurance policy or schedule that applied at the time of the earthquakes. If your damage has been assessed as close to the cap, we will talk to the insurer who held the policy at the time of the earthquake to determine whether there is any private insurer liability and who the claim will be handled by.  

If apportionment shows that no damage from any single event exceeds the EQCover cap, the settlement to the building will be managed by us. However, if damage from a single event is over the EQCover cap, then we will discuss your settlement options with you and  the private insurer. If you bought the home after the Canterbury earthquakes, a private insurer settlement may not be available if the damage is over the EQCover cap.

In many cases, a house may have damage over the cap amount, but settlement will still be managed by us because the damage is spread across more than one event. For example, a house with damage of $160,000 spread across two events could have two claims for $80,000 each, meaning the claim will remain with NHC rather than be handed over to your private insurer. 

How damage from each event is determined

If your property was assessed after each event, apportionment is straightforward as we’ll have records of the damage that occurred with each quake. But, if there was no time to collect this information before the next quake happened, we use a variety of industry-accepted methods to establish how damage should be apportioned.

Alongside the information you provide, this may involve comparing the damage with similar properties in the area where we know what damage occurred and when it occurred. The methods we use have been in place since the apportionment process was developed in 2011.

Apportionment ensures NHC and private insurers can show reinsurers how and when the damage was caused and show that NHC is only paying for the damage caused by the event claimed for.  

The apportionment process must be robust to maintain the credibility of NHC and the New Zealand insurance industry with international reinsurers.