Earthquake Commission (EQC) levies will increase from 1 November to help rebuild its Natural Disaster Fund (NDF), which has been depleted following the Christchurch and Kaikōura earthquakes.
“EQC has provided huge support to New Zealanders following the Christchurch, Seddon, and Kaikōura earthquakes, but in the process it has exhausted its reserves,” Finance Minister Steven Joyce says.
“EQC has a Government guarantee and $4.7 billion in re-insurance cover, so homeowners will be covered if there is another natural disaster, but we need to start the process of replenishing the fund so it is available to contribute to future natural disasters.”
Insured homeowners currently pay 15c per $100 of insurance cover, up to a maximum of $207 a year, as part of their insurance premiums. From 1 November homeowners will pay 20c per $100 of insurance cover, with an annual cap of $276.
“This is an increase of up to $69 per homeowner per year, including GST,” Mr Joyce says.
Minister Responsible for the Earthquake Commission Gerry Brownlee says the levy rise is needed to ensure EQC is on a sustainable footing into the future.
“It would currently take more than three decades before the NDF reaches EQC’s reinsurance excess of $1.75 billion – and that’s in the absence of any significant natural disaster like the Kaikōura earthquake. The new levy rates mean we will be well on the way to restoring the Fund to this level within 10 years,” Mr Brownlee says.
The Government’s review of the EQC Act more generally continues to progress.
“I expect that Cabinet will make decisions on the EQC Act Review in the coming months, however this is not expected to have any further impact on levy rates,” Mr Brownlee says.