Canterbury earthquake building claims

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

If you have concerns about the quality of repairs or missed damage to your property following the Canterbury earthquake sequence, please visit our Getting your claim reviewed page.

The information provided on this webpage is specific to the Canterbury earthquake events and in accordance with the detailed provisions of the Earthquake Commission Act 1993 (EQC Act), which was current at the time.

The settlement process for reopened claims

If you’ve discovered missed earthquake damage to your home, or you believe sub-standard repairs were made, you can request a review of your original Canterbury building claim.

Once your property has been assessed and it’s accepted 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, 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 it’s found 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 in writing if we will cover the additional costs.

An excess applies to EQCover 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.

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 to the same property following aftershocks. The ruling declared that EQC cover is renewed after each event as long as the property remains insured.

Apportionment

If your home suffered damage from more than one earthquake event, we need to determine how much damage was caused by each individual quake, and whether subsequent quakes made the initial damage worse. This process is called apportionment.

Because cover begins again after each event, it’s necessary to determine when the damage occurred so we can work out which costs sit with us, and what might sit with your private insurer.

Your exact EQC cap is shown in your insurance policy. If your damage has been assessed as close to the cap, the decision must be reached on who the claim will be handled by: us or your private insurer. If apportionment shows that no damage from any single event exceeds the cap, the settlement to the building will be managed by us. However, if damage from a single event is over the EQC cap then we will discuss your settlement options with you and your private insurer.

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

If your property has been 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 need to use a variety of industry-accepted methods to establish how damage should be apportioned. Alongside the information you provide, this may also include comparing the damage with other 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 that EQC Toka Tū Ake (now NHC Toka Tū Ake) and private insurers can show reinsurers how and when the damage was caused, and show that we are only paying for the damage caused in the event claimed for.

It is essential that the apportionment process is robust to maintain the credibility of our organisation and the New Zealand insurance industry with international reinsurers. If reinsurers withdraw from the New Zealand market, no one will be able to offer insurance cover to homeowners.