Residential insurance

New Zealand enjoys comparatively high levels of household insurance with, by some estimates, around 90% of New Zealand homes insured. As a consequence, natural hazard events can generate high levels of claims, even in areas with low population density.

New Zealand enjoys comparatively high levels of household insurance with, by some estimates, around 90% of New Zealand homes insured. As a consequence, natural hazard events can generate high levels of claims, even in areas with low population density.

EQC received just over 38,000 claims for residential damage caused by the 14 November 2016 earthquake, making it the second largest claims event in EQC’s 70+ year history, after the Canterbury earthquakes. Treasury’s preliminary estimates indicate that the direct fiscal costs of the earthquake, overall, could be up to $3 billion with $1 to $2 billion of this potentially funded through insurance proceeds.

As at 31 August 2017, the total value of all insurance claims for the 14 November Kaikōura earthquake is over $2 billion with most of the losses in commercial claims at $1.48 billion, with residential claims amounting to nearly $0.55 billion.

While Christchurch, Wellington, and North Canterbury are the primary locations for claims lodged, claims have also been received from Invercargill through to Northland. To provide a simpler process for residential customers with claims from the November earthquake, in December 2016, EQC and a number of private insurers signed a memorandum of understanding to allow private insurers to act as EQC’s agents. Under the arrangement, participating insurers are receiving, assessing and settling home and contents claims for earthquake damage from their own customers, including those claims that are under the EQC cap. Insurers, acting as EQC’s agents, therefore need to ensure that customers receive their correct entitlements under the EQC Act.


EQC is still managing some claims directly. Private insurers don’t insure land damage so EQC is looking after all land claims. In addition to around 3,000 land claims, EQC is also managing just over 2,500 building and contents claims. These claims are mainly from people who have an open claim from another natural disaster event (for example the 2013 Seddon earthquake or the 2010-2011 Canterbury earthquakes). Again this is so homeowners can deal with a single party rather than both EQC and a private insurer.

The new approach is a trial and draws on lessons learnt from the Canterbury 2010-11and the 14 February 2016 earthquakes. The private insurers and EQC have looked to put the customer at the heart of the claim management approach, and work much more closely with the wider insurance industry to achieve this. In addition the collaborative approach has enabled EQC and insurers to co-ordinate their effort and resources to respond to this.


Private insurers and EQC have worked closely with local authorities in the most affected regions to ensure any insurance related issues are addressed as soon as they arise. Also EQC and insurers have been active participants in local community meetings and information clinics, and engaged in many forums where residents have been able to have one-on-one discussions with their insurer or EQC about their claims.

Science plays an important role in EQC’s response to the earthquake. Geotechnical and geospatial information, together with other data, has been used to identify the locations that suffered the worst damage and from this EQC and insurers have been able to identify and prioritise customer claims for assessment and settlement. Properties with the most serious land and building damage as well as properties owned or lived in by vulnerable people or who have lost their primary heat source, have been prioritised.


EQC and insurers expect to have 75% of residential settlements completed by Christmas and the rest in early 2018.EQC and insurers expect to have 75% of residential settlements completed by Christmas and the rest in early 2018.

Across the three most affected districts, at least 92% of claims were assessed as at 30 September 2017, and about half have been settled.

EQC analysis of claims, by size of claim, reveals that:

  • Almost 15 % of the 30,700 residents in Marlborough have lodged a claim for building damage, and based on the settlements made to date majority of these are valued at less than $50,000. (As of 30 September 2017, combined total of insurer-managed customers where EQC has reimbursed the insurer the claim value and EQC-managed customers paid. EQC expect that payment proportions will change over time and that the majority of claims will be valued at less than $50,000, as more settlements from EQC’s agents are invoiced to EQC for reimbursement.)
  • In Hurunui, almost one quarter of the 12,000 or so residents lodged a claim for building damage, and the majority of these are also valued at less than $50,000.
  • Most of the 2,080 Kaikōura residents lodged a claim, and a high number of the claims paid to date are valued at more than $50,000. However, EQC is forecasting that overall the majority of residential building claims in Kaikōura will be valued at less at less than $50,000 and over $50,000.