August 2013
Householders’
Guide to
EQCover
Householders’
Guide to
EQCover
Insurance for dwellings,
personal property, and land
This is a customer
guide to the Earthquake
Commission Act 1993
and the Earthquake
Commission Regulations
1993, as at April 2013.
It describes the cover
you automatically get from
the Earthquake
Commission, if you have a
home and/or contents fire
insurance policy.
However, the Earthquake
Commission Act 1993
and the Earthquake
Commission Regulations
1993 will always prevail
over the content of this
booklet.
2 | EQCover
You should always refer to
the Act when determining
issues involving the Act.
If you need more
information after reading
this guide, contact EQC
direct on 0800 326 243.
Note: EQC legislation
contains full details.
EQCover | 3
Contents
Part one Important general information
Part three Items not insured
What is EQCover? 6
Your EQCover Guide
7
EQCover and your insurance company
7
You should tell your insurance company if
7
How and when to claim
7
Part two How EQCover works
What is insured by EQCover
8
What EQCover insures you against
10
What EQC will pay
10
The limits of EQCover
12
Getting extra insurance
13
Excesses
13
4 | EQCover
What is not insured by EQCover
15
Part four After an earthquake or
natural disaster
If you have damage after an
earthquake or natural disaster
16
Settle a claim
18
Pay a claim to someone else
18
Pay a claim when premium is paid by mistake
18
Refuse to pay a claim
20
After a claim is paid
21
EQC may limit EQCover
21
EQCover | 5
Important
general
information
What is EQCover?
EQCover is the name of
EQC’s earthquake and
natural disaster insurance
for dwellings, personal
property, and land.
Note: The Commission
does not have any
discretion to consider
claims lodged after 3
months from the date
of damage.
See time limits for reporting
damage on Page 7 of
this guide.
Your EQCover Guide
EQC has made every
effort to ensure that this
guide is accurate at the
date of printing. However,
in the event of a dispute
relating to your EQCover,
the provisions of the
Earthquake Commission
Act 1993, the Earthquake
Commission Regulations
1993 and any subsequent
legislative amendments
will apply.
EQCover and your
insurance company
EQCover is obtained
automatically when you
take out a home or
contents fire insurance
policy. The premium you
pay to your insurance
company includes the
premium for EQCover.
EQCover ceases if your
fire insurance policy is
cancelled or suspended
or is otherwise not in
force, or if EQC cancels
the EQCover.
You should tell
your insurance
company if:
•You want to insure a
building that contains
more than one dwelling
(see “What is insured by
EQCover” page 8);
6 | EQCover
•You want EQCover of
less than $100,000 plus
GST on your dwelling
(see “The limits of
EQCover” page 12);
•You want to insure your
dwelling for more than
$100,000 plus GST, or
your personal property
for more than $20,000
plus GST (see “Getting
extra insurance” page
13). Any additional
insurance will be
provided by your insurer
and will not be part of
your EQCover.
How and
when to claim
You must contact EQC
within 3 months from
the day your property/
contents are damaged and
provide specific details
of the damage and other
information, such as the
name of your insurance
company and policy details
(EQC requires your insurer’s
details – not your broker’s
details – to speed up the
process). EQC will advise
whether you can arrange for
repairs to be done.
EQC may also organise for
a representative to call and
assist with your claim. To
lodge a claim with EQC, call
0800 DAMAGE (326 243)
or visit www.eqc.govt.nz
EQCover | 7
How
EQCover
works
A dwelling is any selfcontained premises used,
or intended to be used,
as a home or a holiday
home.
EQCover insures your dwelling,
personal property, and land
What is insured
by EQCover
Residential buildings
•Separate dwellings in
the same building. If you
are insuring a building or
a part of a building with
more than one dwelling
in it, you should tell your
insurance company how
many dwellings there are,
otherwise you will have
EQCover as though there
was only one dwelling;
•Separate buildings
used by the occupiers of
the dwelling (e.g. sheds
and garages);
8 | EQCover
•Services that you own
(e.g. water pipes and
electrical cables) up to 60
metres from the dwelling.
Personal property
Your personal property
means your personal effects
and the contents usually
located in your dwelling.
Some items are excluded
(see “What is not insured by
EQCover” page 15).
Land
If your dwelling is insured,
EQCover also insures at
least some of your land.
This cover is limited and
is restricted to land that is
within your land holding and
comprises only:
•The land under your
dwelling or outbuildings
(eg. garage or sheds);
•The land within 8 metres
of your dwelling or
outbuildings;
•The land of the main
accessway (or under
or supporting the main
accessway) up to 60
metres from your dwelling,
but not any artificial
surfaces like concrete
or asphalt that cover the
accessway.
EQC cover for land
damage also includes:
•Bridges and culverts that
are within 8 metres of
your dwelling, or on land
within 60 metres of your
dwelling, that is part of,
or supports the main
access way; and
•Retaining walls and their
support systems that
are necessary for the
support or protection of
your dwelling or insured
land (including the main
access way) if they are
within 60 metres of the
house.
EQCover | 9
What EQCover
insures you against
You are insured against
physical loss or damage
to your residential buildings,
your personal property,
and land by earthquake,
natural landslip, volcanic
eruption, hydrothermal
activity, tsunamis and fires
resulting from these natural
disasters.
Your land (but not
your buildings and
contents) is also
insured against
storm and flood
damage.
After an earthquake or
any of these other natural
disasters has occurred,
your property might not
be damaged but it might
be at imminent risk of
damage as the direct result
of that disaster.
10 | EQCover
In this situation you could
make a claim to EQC, and
EQC may sometimes agree
to pay the costs of taking
reasonable steps to protect
your property or to prevent
further damage (see “After
an earthquake or natural
disaster” page 16).
Note that EQC cannot pay
for the cost of protection
works against future natural
disasters. That is a cost that
property owners must bear.
What EQC will pay
Any payments by EQC are
subject to the conditions
set out in the two sections
on pages 12 and 13,
“The limits of EQCover”
and “Excesses”.
Your dwelling
Land
EQC insures your dwelling
for its replacement value
up to the limits described
on page 12. EQC will meet
the costs of repairing or
rebuilding your home to a
condition substantially the
same as when new,
using current building
materials and methods.
This does not mean that
your dwelling must be
reinstated exactly to its
previous condition but this
will be discussed with you.
EQC calculates your land
claim settlement based on:
Personal property
EQC will pay up to the
limits described on page
12 and on the same basis
as that provided under your
fire insurance policy, either
as new (replacement value)
or taking into account
age and wear and tear
(indemnity value).
•the indemnity value of
any bridges, culverts, and
retaining walls and their
support systems that are
covered and have been
damaged plus;
•the cost to repair land that
is damaged or lost (or in
some circumstances the
reduction in the value of
the land where repair is
inappropriate).
In some circumstances,
EQC may make a
settlement based on
the maximum entitlement
under the Act.
The maximum entitlement
is often (but not always)
the value of the minimum
allowable lot size under
your district plan.
EQCover | 11
The limits of EQCover
Your dwelling
The maximum
amount EQC will pay
for your dwelling is
up to $100,000 plus
GST per claim.
EQC will pay less than the
maximum amount if:
•You have an insurance
policy for replacement
cover that is less than
$100,000 plus GST.
In this case the maximum
amount EQC will
pay for your dwelling
is the amount of the
replacement cover; or
•Your private insurance
policy specifies an amount
for which your dwelling
is insured under the
Earthquake Commission
Act. That amount must be
no less than the amount
arrived at by multiplying
$1,000 by the area in
square metres of the
residential building.
These limits apply to
each dwelling. If you
have told your insurance
company that there is
more than one dwelling
12 | EQCover
in the same building, the
limits for each dwelling are
added together to get the
maximum amount EQC
will pay for the building.
EQC will pay less than this
maximum amount if you
have an insurance
policy on the whole
building for replacement
cover that is for less than
the maximum amount.
Personal property
The maximum amount
EQC will pay for personal
property is $20,000 plus
GST or the amount on your
insurance policy, if that is
less than $20,000.
Land
The maximum amount to
which the land described in
Part Two (“What is insured
by EQCover” page 9) is
insured is either the value
of the land destroyed or
damaged, or the value
of 4,000 square metres
(about an acre), or the
value of the minimum
sized residential building
site allowed in the area in
which you live – whichever
is the lower, plus the
indemnity value of insured
bridges, culverts and
retaining walls.
Getting extra
insurance
If your dwelling or
personal property are more
valuable than the maximum
amounts EQC will pay, you
may be able to arrange
extra cover with your
insurance company.
Excesses
An excess is the amount
you have to contribute
towards a claim that is
accepted by EQC.
The amount of the excess is
deducted from the amount
of your claim.
Your dwelling,
or your dwelling and
personal property
If your claim is for $20,000
or less, EQC will deduct
an excess of $200 and
pay the rest. If your claim
is for more than $20,000,
EQC will pay 99% of it,
deducting an excess of 1%.
Personal property only
Whatever the amount of
your claim, EQC will deduct
an excess of $200 and pay
the rest.
Land
If your claim is for $5,000
or less, EQC will deduct
an excess of $500 and
pay the rest. If your claim
is for more than $5,000,
EQC will pay 90% of
it, deducting an excess
of 10%. However, the
maximum excess EQC
can deduct is $5,000.
If your property can be
repaired or replaced for
less than the amount of the
excess, then EQC will pay
nothing. You will have to
meet the cost of repairs or
replacement yourself.
Where EQC decides
to settle a Canterbury
earthquake claim for
damage to a residential
building or residential land
by reinstatement (usually
through the Fletcher EQR
process), EQC can invoice
you for the excess.
EQCover | 13
Items not
insured
You do not have EQCover
if your fire insurance policy
is not in force (e.g. it has
lapsed or been cancelled).
What is not insured
by EQCover
1. Any items excluded
in your home and/or
contents fire insurance
policies;
16. Bridges or culverts
more than 8 metres
from your dwelling,
or if they are on the
main accessway,
more than 60 metres
from your dwelling;
2. Intangible property, for
example, information
stored on a computer;
17. Retaining walls except for those
mentioned on page 9;
3. Jewellery, precious
stones, money, works
of art, securities,
documents or stamps;
18. Dams, breakwaters,
moles, groynes, fences,
poles or walls;
4. Motor vehicles, or the
parts or accessories of
a motor vehicle;
5. Trailers, or the parts or
accessories of a trailer;
6. Boats or other
vessels, or the parts
or accessories of a
boat or vessel;
7. Aircraft or anything in or
on an aircraft;
8. Explosives;
9. Any bush, forest, tree,
plant or lawn;
10. Growing crops
(including fruit trees and
vines) or cut crops in
the open fields;
11. Animals, including
livestock and pets;
12. Tennis courts, whether
inside or outside and
whatever the surface;
13. Jetties, wharves or
landings;
14. Roads, streets, drives
or paths;
14 | EQCover
15. Any paving or other
artificial surface;
19. Drains, channels,
tunnels or cuttings;
20. Reservoirs, swimming
pools, baths, spa pools,
tanks or water towers;
21. Burglary, theft or
vandalism following an
earthquake or natural
disaster;
22. The costs of staying
somewhere else
temporarily after an
earthquake or natural
disaster;
23. Any contents used
solely or principally for
commerical purposes.
Items 18, 19 and 20 may
be insured if they are part
of the building that is your
residential building.
Any of the above items
might be insured by your
own insurance policy.
You should check your
policy to see if that is the
case or alternatively ask
your insurance agent or
insurance company.
EQCover | 15
After an
earthquake
or natural
disaster
Keep a record of damage before
you clean up or throw goods away
If you have damage
after an earthquake or
natural disaster
•Listen to your local
radio station;
•You can make temporary
repairs for safety or to
prevent further damage
or discomfort;
•If you can, take
photographs of the
damage before you clean
up or move anything;
16 | EQCover
•You can clean up spillages
and breakages, for
example, broken windows,
bottles and crockery, but
don’t throw away anything
unless it is perishable;
•You can dispose of
perishables, for example,
food from a broken
deep freezer or food that
has been spilled, but
photograph and make a
list of the items before
you bury, burn or dump
them safely;
•You can immediately
repair or get repaired
essential services,
for example, toilets
and water systems, but
keep everything that is
replaced and keep a
copy of the bill;
•Notify EQC of damage as
soon as possible. EQC
can only accept claims if
made within 3 months of
the damage occurring.
But EQC has no discretion
to accept notification of
the damage after 3 months
from the damage occurring.
There is no benefit delaying
notifying EQC even if
you think there may be
additional damage within
the 3 months (e.g. from
earthquake aftershocks).
Tell us as soon as you can.
EQCover | 17
Settle a claim
Depending upon the
circumstances, EQC
may settle your claim in a
number of ways, including:
•By paying the amount
reasonably required to
repair or replace the
damaged property;
•By replacing things that
have been damaged or
destroyed. This would
usually apply to personal
property, for example, a
television set, but it might
also apply to parts of a
building like a window or a
hot water cylinder;
•By arranging to have
your property repaired;
•By arranging to have
your dwelling removed
to a different place,
either on your section or
somewhere else;
•By building you a
new dwelling in a
different place;
•By removing soil and
rubble that has fallen onto
your land in a landslip;
•By doing any combination
of these things.
18 | EQCover
Repairs or replacement
do not have to be exact or
complete, but they must
be reasonably sufficient as
circumstances permit.
We will discuss the repair
or replacement with you.
Pay a claim to
someone else
If another person or
organisation has an
interest in your property,
for example, a mortgagee,
EQC may have to make the
payment for loss or damage
directly to that person or
organisation.
Pay a claim when
premium is paid
by mistake
It may be that even though
you have paid an EQC
insurance premium, your
property is one which the
Earthquake Commission
Act says EQC cannot
insure. If a genuine mistake
has been made, then EQC
may decide to pay a claim
on that property in order
to reduce any hardship
that the mistake would
otherwise cause.
EQCover | 19
Refuse to pay a claim
EQC can refuse to pay
a claim or part of a claim
in certain circumstances,
including if:
•An earlier claim on the
property has been paid
but the property has not
been repaired or replaced
and this has caused
or helped cause the
damage; or
•You have not followed the
requirements of some law
or bylaw and that caused
or helped cause the
damage. For example, you
built the damaged home
on unstable land without a
building consent; or
•The damaged building
was not built to a standard
that was appropriate at
the time it was built and
this caused or helped
cause the damage.
This does not apply to
your dwelling, but to other
insured buildings, for
example, your garage or
workshed; or
•Damaged retaining walls,
bridges or culverts were
not built to a standard
that was appropriate at
the time they were built
and this caused or helped
cause the damage; or
20 | EQCover
•You have made false or
fraudulent statements to
EQC about your claim; or
•The damage has been
caused by or contributed
to by your carelessness,
or by the previous owner
of your property (if you
knew about it), or you
have not taken reasonable
care of your property; or
•Your Certificate of Title to
the land contains a note
about Section 641A(4)
of the Local Government
Act 1974, Section 36 of
the Building Act 1991 or
Section 74 of the Building
Act 2004. These are
about issuing a building
consent at the owner’s
risk; or
•There has already been a
claim for landslip (or storm
or flood damage to land)
and EQC has written
to tell you or a previous
owner that it thinks there
could be further damage
that could be, but has
not been, reasonably
avoided either by you or
a previous owner.
If you get a letter from EQC
like the one described in
the last bullet point after
your first claim, you should
write back as soon as you
have done something to try
to prevent further damage.
EQC must place a notice
of its action on the public
record at the District Land
Registry so that a search of
the property title will reveal
what it has done.
EQC will also decline a
claim if the EQC insurance
for the property has been
cancelled. This will be
noted on the Certificate of
Title to the property.
After a claim is paid
EQC will continue your
cover automatically when
a claim is paid. A new
premium may be taken off
the claim payment.
However, if EQC pays
out the maximum amount
of EQCover on a claim, it
may cancel EQCover on
that property. If EQC does
this, it must tell the owner
in writing. EQCover is
most likely to be cancelled
when the cost of repair or
replacement is more than
the maximum amount of
EQCover on the property.
notice of its action on the
public record at the District
Land Registry so that a
search of the property title
will reveal what it has done.
EQC may limit EQCover
If EQC thinks your
property is in imminent
danger, it cannot cancel
EQCover but it may stop
the amount of EQCover
being increased. You will
be notified in writing of this
limitation and notice of it
will be placed on public
record at the District Land
Registry so that a search of
the property title will reveal
it. You can write to EQC
at any time and ask if the
limitation can be removed.
If your EQCover is
cancelled, you can write to
EQC and ask for EQCover
to start again once the
property has been repaired
or replaced. If EQC cancels
EQCover it must place a
EQCover | 21
22 | EQCover
EQCover | 23
Address:
EQC
PO Box 311
Wellington 6140
Email:
[email protected]
Freephone:
0800 DAMAGE (326 243)
Fax:
04 978 6431
Website:
www.eqc.govt.nz
24 | EQCover