New Zealand is a seismically active country. Our communities are exposed to the perils that come with this, namely earthquakes, volcanic and hydrothermal activity and tsunami. We also regularly suffer from landslips, storms and floods as a result of our weather and geography. When these perils strike, affordable, widely held home insurance is critical to how individuals and communities recover.

By international standards New Zealand homeowners carry high rates of catastrophe insurance. The EQC scheme is a major reason for this. EQC provides homeowners with a significant block of insurance cover against natural disasters that is affordable and costs the same nationwide. This keeps total premiums for insurance covering these perils affordable for most homeowners.

The Government has developed a number of reform proposals for discussion. These are designed to: ensure the EQC scheme remains focussed on insuring homes; resolve the difficulties experienced in Canterbury with the interaction of land and building cover; better integrate EQC and private insurers’ claims handling processes; and ensure the ongoing financial sustainability of the scheme.