After experiencing a start to the year like no other, with floods in January and then Cyclone Gabrielle sweeping through the North Island in mid-February, the recently passed Natural Disaster Insurance Act will be welcomed by all.
The Act aims to improve the Earthquake Commission scheme by making it easier to make a claim following a natural disaster. While it won’t apply to the damage caused by the recent floods or the damage caused by Cyclone Gabrielle, it will apply on damage caused by future natural hazard events.
In quick summary, the Act will:
- provide up to $300,000 of cover per event for each dwelling in a residential building (in most cases).
- require the levy to be the same amount for the first $300,000 of cover, whether or not the property is at high risk or low risk of a natural hazard.
- make changes to the cover provided for buildings with both residential and commercial uses.
- adds a new requirement that claims must be settled in a timely and fair way.
- introduce a new regime: an excess is payable for residential building and land claims at $500 per dwelling.
The Act will come into force on 1 July 2024, and replace the Earthquake Commission Act 1993.
