All insured Kiwi homes have doubled their EQCover
A law change that doubled EQCover for New Zealand homes in 2022 has now been fully implemented, with the amount for EQC building cover increasing from $150,000 to $300,000 (+ GST). The cover provides first loss insurance for damage from named natural hazards.
In October last year the building cap on EQCover was increased to keep pace with house prices and building costs. One year on, the change has fully rolled though as all insured homeowners have now renewed their insurance policies to include the upgraded building cap.
“EQCover was created to enable access to affordable home insurance to support the initial losses suffered by communities after a natural hazard event,” says Toka Tū Ake EQC Chief Executive Tina Mitchell.
“New Zealand has one of the highest levels of home insurance in the world, with around 90% of homes with insurance. This is critical to community recovery after large scale events.”
Homeowners receive EQCover for their home and part of their residential land if they have a private home insurance policy in place. EQCover is a specific insurance for damage caused by volcanic eruptions, earthquakes, tsunamis, land slips, and hydrothermal activity, as well as some limited cover for damage to residential land from storms and floods.
Insurance cover for damage to land is a unique feature of the insurance landscape in New Zealand and the formula for calculating it did not change in 2022. Claims for damage to land have been more frequent in the last 18 months with extreme weather events across the country.
“Limited land cover is a unique benefit that only homeowners in New Zealand can access. However, it is also complex and takes time to work through. It is also only designed as a contribution to actual repair costs,” says Mitchell.
Mitchell encouraged homeowners to regularly review their policies to know what they are covered for and make sure to understand the risks to their properties.
“New Zealand is a place where we all live with some kind of natural hazard risk. It’s a good idea to understand what natural hazards could affect the area you live in so you can consider ways to protect your land from damage before an event and and make your own decisions about how to manage any insurance shortfall.”
Mitchell suggests homeowners check out the Toka Tū Ake website which has several resources to help homeowners be better prepared.
Tips for checking your insurance:
- Find out what your insurance covers (both EQCover and your private policy), as well as what it doesn’t cover (these are known as exclusions).
- Check that you will have enough private insurance cover to rebuild your home and replace your valuables after a natural disaster.
- Review your private insurance cover regularly to make sure it keeps pace with any changes in the value of your property, and any increase in construction costs.
- Does your private insurance cover consequential loss, such as an accommodation allowance?
- Can you find your insurance documents easily? They’re often stored online via your private insurer, and you might also like to store physical copies somewhere safe too.
“We cannot control the weather, but there are many steps we can take to protect our families and properties,” Mitchell says.