Parliament passes legislation making insurance claims easier after natural disasters

Parliament has approved on third and final reading a proposed legislation making insurance claims easier after natural disasters.

The Natural Hazards Insurance Act 2023 (NHI Act) will replace and simplify the current Earthquake Commission Act and come into effect on 1 July 2024. The bill incorporates several recommendations from Dame Silvia Cartwright's 2020 public inquiry into the earthquake commission (EQC). The report recommended that there must be appropriate policies and an operating structure for EQC in place.

"This government is improving the earthquake commission scheme, so in the future, New Zealanders don't have to go through the same traumatic experiences as the people of Canterbury," said Dr Deborah Russell, the minister responsible for the EQC. "This is also relevant in the wake of the recent floods in Auckland and wide-spread damage caused by Cyclone Gabrielle."

Russell said that the NHI Act clarifies the rules for mixed and multi-use buildings, simplifies the excesses and calculations for retaining walls, bridges, and culverts, and provides a standing dispute resolution service. The new law also recognises that the EQC's mandate extends beyond just helping people recover from earthquakes. It also provides a new insurance scheme covering storms, floods, landslips, volcanoes, tsunamis and hydrothermal activity.

Russell emphasised the importance of insurance in helping communities recover after a natural disaster, saying, "Compensating policy owners for the damage caused by a natural hazard means they can repair their home and move on with their lives."

A claimant code and a standing dispute resolution service will be implemented so that future claimants can access support in the immediate aftermath of a natural disaster. Under the new law, claimants will still lodge claims with their insurer to access entitlements via the Toka Tū Ake – Natural Hazards Commission following any event.

Russel confirmed that the NHI Act will not affect entitlements of any current claims, or any claims made before its commencement next year.