Brief Overview of EQC
EQC was established by the Government in 1945 to provide earthquake and war damage cover for purchasers of fire insurance. Later, cover for other natural disasters was included and, later still, cover for war damage dropped. The modern EQC is a Government-owned Crown Entity.
For more than 60 years it has been collecting premiums from insured people and during that time a substantial nest egg against damage, called the Natural Disaster Fund, has built up.
There is currently around $5.6 billion in the Fund which is backed up by reinsurance from overseas groups and a Government Guarantee. The Government Guarantee ensures that EQC will always be able to meet its obligations, regardless of the circumstances.
EQC's Insurance
EQCover is the Commission's insurance scheme for residential property.
Property Insured
- Dwellings (self-contained premises used as a home, including apartments);
- Most personal property but excluding some types (e.g. motor vehicles and art);
- The land immediately around the dwelling, main accessways, and retaining walls, within certain limits.
Types of natural disasters covered
- Earthquake, natural landslip, volcanic eruption, hydrothermal activity, tsunami;
- In the case of residential land, a storm or flood;
- Fire caused by any of these.
Extent of Cover
Dwellings are insured up to a maximum of $100,000 plus goods and services tax (GST) and personal effects are insured up to $20,000 + GST. EQC pays the value of damaged land at the time of the earthquake or natural disaster, or the repair cost, whichever is lower.
Dwellings are covered on a replacement value basis. Personal property is insured on the same basis as the household insurance policy covering the same property. Some retaining walls are covered, but on an indemnity basis.
Catastrophe Response Programme
In a time of major disaster, such as a large earthquake, EQC works through its Catastrophe Response Programme (CRP). The CRP sets out how EQC will cope with the substantial increase in resources that will be required at such a time. The programme includes an alternative operations site and the provision of additional staff and equipment.
Research & Education
EQC also encourages and funds research about matters relevant to natural disaster damage and it educates and otherwise informs people about what can be done to prevent and mitigate damage caused by natural disasters.