Insurance cover has proved to be a headache for a number of Australians hit by the recent East Coast storms. Many homeowners were surprised to discover they're not covered for damage caused by the sea or flooding.

Confusion over insurance cover is a familiar story following natural disasters in Australia—but in New Zealand, it's a different story.

Every New Zealand homeowner with a fire insurance policy is automatically covered by the New Zealand natural disaster insurance scheme, which covers earthquakes, landslips, volcanic eruptions, tsunamis, storm damage and floods.

New Zealand Minister, Gerry Brownlee, says the scheme has served New Zealand well, and a 'very big federal scheme' could work in Australia.