From 1 October 2022, the Earthquake Commission (EQC) will double cover for damage caused to dwellings by natural disasters. Private insurance will cover the gap between the EQC portion and the value of the dwelling. The government’s intention is to try to lower premiums for many.

What does this mean for you?

Since the Canterbury earthquakes, insurers have focused on risk-based pricing for house and commercial insurance.

Broadly speaking, if you are in a higher risk area, your premium will usually be higher. Some parts of the country, like Hawkes Bay and Wellington, have seen significant premium increases.

But Central Otago is a benign environment in relation to natural hazards covered by EQC.

We don’t have any hydrothermal fields or volcanoes, and the coast is about as far away as is possible in NZ. Earthquakes and landslips are our main concern.

Insurers can charge less based on our location’s low risk. EQC cover, however, is charged at the same price across New Zealand, so someone with a house on a cliff-face in Wellington pays the same levy as an Alexandra resident living on the flat on Earnscleugh Road.

Unfortunately, when everyone pays the same rate, some are disadvantaged.

The coming change may actually increase total policy costs for Central Otago homeowners as the EQC levy portion rises and the insurer premium reduces at a lower rate than in other areas.

This new formula will be applied to home policies renewed after October this year, and insurers may react differently to the changes.

Therefore, it’s a great time to review your policies. If you need help C&R Insurance will review for you with no obligation.

Financial and coverage benefits that might come from changing your insurance company or your policy. For example, you might consider paying a higher excess (the amount that you pay in the event of a loss) to obtain a lower annual premium.

Being locals, we can make personal visits to your home, which means we are able to look around and ask relevant questions about additions like gazebos, sheds and outdoor kitchens to make sure you are covered correctly.

Contact us C&R Insurance for more details or to answer any questions you may have.

Steve MacManus - Broker C&R Insurance

Author

Steve has over 30 years of Finance & Insurance experience. His experience and technical knowledge of the Insurance industry has proven to be a major benefit to

clients and the company in the past. Steve joined C&R Insurance two and a half years ago, after 13 years working for a corporate broking house where he dealt with large complex corporate accounts. Steve’s abundance of industry knowledge and dedication to achieve positive outcomes for clients is what gives him an advantage when dealing with clients and complicated risks. Outside of the office Steve was an active part of the Scouts NZ national scout team, He now coaches and competes nationally in Cowboy Action Shooting events and when he isn’t busy gardening, he is out enjoying the outdoors.