EQCover Building Cap Begins Doubling For Homeowners From 1 October 2022

A new law change comes into effect on 1 October 2022 that will see insured homeowners covered for $300,000 of EQCover if their home is damaged by a natural hazard.

This doubles the current EQCover building cap of $150,000 and takes effect when homeowners renew their policies or take out new ones.

The Government announced last September it would double the EQCover building cap and reduce the rate of levies from 20c to 16c per $100 of EQCover.

“House prices and building costs have gone up and this law change responds to those changes. When homeowners renew their existing policy or take out a new policy, their level of EQCover for natural disaster damage will increase to $300,000,” says Toka Tū Ake EQC Chief Executive Tina Mitchell.

“Even if a policy hasn’t been adjusted for the new changes when natural disaster damage occurs, any damage to a home that exceeds EQCover is covered by private insurance, up to the sum insured,” says Mitchell.

Homeowners automatically have EQCover for their home and some residential land if they have a current private insurance policy for their home that includes fire insurance, which most do.

EQCover provides natural hazard insurance for damage to your home and some residential land from volcanic eruptions, earthquakes, tsunamis, land slips, and hydrothermal activity. EQCover also provides cover for damage to some residential land from storms and floods.

Homeowners pay levies for EQCover when they pay for their private insurance premiums. As a result of the increase in EQCover, the EQCover levy paid will also increase in most cases.

For a house insured at over $300,000, the new maximum EQCover levy will be $480*, based on the levy rate reducing to 16 cents per $100 of cover.

In 2021, Toka Tū Ake EQC partnered with eight private insurers – representing more than 95% of the New Zealand home insurance market - to deliver a world-leading natural disaster response model, where insurers manage EQCover claims alongside their private insurance claims.

“Our partnership model simplifies the claims process for homeowners by giving them a single point of contact if their home is damaged by a natural disaster. It’s as simple as calling your insurer and they’ll manage the entire claim process, including the EQCover component,” says Mitchell.

All figures are GST exclusive. *The maximum current EQCover levy is $300.

© Scoop Media