New Zealand passed new natural hazard insurance legislation in 2023, and it took effect on 1 July 2024. The Natural Hazards Insurance Act renamed EQC, introduced a flat excess, clarified land cover, and set out the claims process in modern law. Here is what it all means in plain English.
The Natural Hazards Insurance Act 2023 (NHI Act) is the legislation that now governs how natural disaster insurance works for residential property in New Zealand. It replaced the Earthquake Commission Act 1993, which had been the framework for over 30 years.
The new Act came into force on 1 July 2024, following a comprehensive review of how NZ's natural disaster insurance system performed - particularly in the wake of the Canterbury earthquakes and subsequent events. The review found that while the system was fundamentally sound, significant improvements were needed to the building cap, land cover provisions, and how claims were handled.
Under the NHI Act, the government entity formerly known as the Earthquake Commission (EQC) was renamed the Natural Hazards Commission Toka TÅ« Ake (NHC). While many New Zealanders still use the name EQC, the official name reflects the organisation's broader role and its bicultural identity. Toka TÅ« Ake continues to administer the Natural Hazard Fund, which pays for residential natural disaster claims.
The core principle remains the same. If you have a private home insurance policy that includes fire cover, you automatically get natural hazard cover (NHCover) for damage from earthquakes, landslides, volcanic activity, hydrothermal activity and tsunami, plus fire caused by any of these. NHCover also covers residential land (not the home itself) for storm and flood damage. But the details of how that cover works, what excess applies, and how claims are managed changed under the new Act.
The shift from the Earthquake Commission Act 1993 to the Natural Hazards Insurance Act 2023 brought several significant changes. Here is how the two pieces of legislation compare on the things that matter most to homeowners.
How the old and new legislation compare for homeowners
The table below summarises the most significant changes the NHI Act introduced. Each of these is covered in more detail in the sections that follow.
| Area | Under the Old EQC Act | Under the New NHI Act |
|---|---|---|
| Building cap | $150,000 + GST per dwelling until 1 October 2022, then $300,000 + GST | $300,000 + GST per home (unchanged by the NHI Act) |
| Land cover | Separate land cover assessed through its own process | Land cover redesigned with clearer criteria for residential land damage |
| Claims management | EQC managed claims directly until mid-2021, then insurers began managing them on its behalf | Private insurers continue to manage most claims on behalf of NHC |
| Excess | Building excess 1% of the settlement (minimum $200, maximum $3,450); land excess 10% (minimum $500, maximum $5,000) | $500 per insured home for building claims and $500 for land claims (both include GST) |
| Entity name | Earthquake Commission (EQC) | Natural Hazards Commission Toka TÅ« Ake (NHC) |
| Apartments/unit titles | Complex arrangements; bodies corporate dealt with EQC separately | Simplified provisions with clearer body corporate processes |
| On-sold properties | Limited clarity on transferring claim rights | Clearer rules about obligations when properties change hands with open claims |
| Contents | Not covered since 1 July 2019, when EQC contents cover was removed | Still not covered. Contents are covered only by private contents insurance |
For the full legislative text, the Natural Hazards Insurance Act 2023 is available on the NZ legislation website. The Insurance Council of New Zealand (ICNZ) also has plain-language summaries of how the changes affect policyholders.
The building cap is $300,000 + GST per home. It is worth being clear that this figure did not come from the NHI Act. The cap doubled from $150,000 + GST to $300,000 + GST on 1 October 2022, under the old Earthquake Commission Act, and the NHI Act kept it at that level when it took effect on 1 July 2024.
For most of the life of the old EQC Act, the $150,000 cap had not kept pace with construction costs. After the Canterbury earthquakes, many homeowners found that the EQC cap covered only a fraction of their damage, leaving their private insurer - and in some cases the homeowner themselves - to cover a much larger portion. The gap between the EQC cap and actual repair costs was a major source of frustration.
The $300,000 + GST cap means NHC covers a significantly larger share of natural disaster building damage before your private insurer needs to step in. For a claim costing $350,000 to repair, Toka TÅ« Ake would cover the first $300,000 (plus GST), and your private insurer would cover the remaining $50,000 up to your sum insured.
That said, the $300,000 cap still may not cover the full cost of major damage for many New Zealand homes. Average rebuild costs in cities like Auckland, Wellington, and Queenstown can easily exceed this amount. This is why adequate private house insurance remains essential - the Toka TÅ« Ake cover is a first layer, not a complete safety net.
The cap applies per dwelling. If you own a property with two separate dwellings (for example, a main house and a minor dwelling or granny flat), each dwelling may have its own $300,000 + GST cap, provided each meets the criteria under the Act. For more on how house insurance works alongside natural hazard cover, see our guide on what house insurance covers.
Land cover was one of the most contentious and complex areas under the old EQC Act, particularly after the Canterbury earthquakes. Thousands of claims involved land damage - such as liquefaction, lateral spread, and land subsidence - and the assessment process was slow, confusing, and often disputed.
Under the old Act, land cover was assessed separately from building damage. There was a defined area of residential land that EQC covered, but the criteria were unclear in many situations. This led to lengthy disputes, particularly in Canterbury where entire suburbs experienced land damage that was difficult to categorise.
The NHI Act 2023 redesigned land cover to provide clearer criteria for what types of residential land damage are covered and how they are assessed. The Act defines the land that Toka TÅ« Ake covers in relation to the dwelling - essentially the land under and immediately surrounding the residential building, plus land necessary for access and essential services.
The new provisions aim to reduce the ambiguity that caused so many problems in Canterbury. However, land damage claims remain inherently complex because every property is different. If your land is damaged in a natural disaster, the assessment will consider the specific characteristics of your property and the nature of the damage.
For more detail on how land cover works under the new Act, the Toka TÅ« Ake website provides guidance on what land is covered and how assessments are carried out. The Settled.govt.nz website also has useful information on land-related property issues.
The NHI Act kept the insurer-managed claims model that has been in place since mid-2021, when EQC began partnering with private insurers to manage claims on its behalf. Under this model, your private insurer is the single point of contact for most natural hazard claims, so you usually do not deal with NHC directly.
This was a direct response to the problems experienced after the Canterbury earthquakes, where homeowners often had to navigate separate claims with both EQC and their private insurer. The dual process created confusion, delays, and inconsistent outcomes. Under the new system, your insurer handles everything.
For a detailed look at the general claims process, see our guide on how to claim house insurance.
How claims are handled from start to finish
An earthquake, volcanic eruption, landslide, hydrothermal event, or tsunami damages your residential property, or a storm or flood damages your residential land. Ensure everyone is safe and follow Civil Defence instructions.
Call your insurer's claims line. You do not usually need to contact NHC directly. Your insurer will lodge your claim and begin the process. Document all damage with photos and videos before any clean-up.
Your insurer arranges assessments, which may include engineers, building assessors, or geotechnical specialists depending on the nature and scale of the damage.
Your insurer determines whether the damage falls within the Toka TÅ« Ake cap ($300,000 + GST) or exceeds it. Claims within the cap are settled by your insurer on behalf of Toka TÅ« Ake.
For claims within the cap, your insurer manages repairs or pays the settlement using Toka TÅ« Ake funds. For claims exceeding the cap, your insurer covers the portion above $300,000 + GST under your private policy.
The NHCover excess is $500 per insured home for a building claim and $500 for a land claim, and both are deducted if your claim covers both. Your private policy excess applies separately to any part of the claim your private insurer pays.
If you are unhappy with how your claim is handled, you can escalate it through your insurer's internal complaints process. If that does not resolve the issue, the Insurance and Financial Services Ombudsman (IFSO) can investigate disputes. For general guidance on your insurance rights, see our guide on EQC (Toka TÅ« Ake) explained.
Apartments and unit title properties presented unique challenges under the old EQC Act - and the Canterbury earthquakes exposed many of them. Bodies corporate had to deal with EQC separately from individual unit owners' private insurers, creating a complicated and often adversarial process.
The NHI Act 2023 introduced clearer provisions for how natural hazard cover applies to unit title properties. Key changes include:
The body corporate's insurer now manages the natural hazard claim for the building as a whole. Individual unit owners do not need to lodge separate building claims with Toka TÅ« Ake. This streamlines the process significantly, particularly for larger apartment complexes.
The $300,000 + GST cap applies per unit (dwelling) within the building, not per building. This means a 20-unit apartment building has up to $6 million + GST in Toka TÅ« Ake building cover (20 x $300,000), managed through the body corporate's insurer.
The Act also clarifies how common property (shared areas like lobbies, stairwells, and car parks) is treated under natural hazard cover. This was a grey area under the old legislation that caused significant disputes in Canterbury.
If you own an apartment or unit title property, it is worth checking with your body corporate to understand how your building's insurance is structured and how a natural hazard claim would be managed. The Consumer NZ website has useful information on body corporate insurance obligations.
Not everything changed under the NHI Act. Several core aspects of New Zealand's natural disaster insurance system remained the same:
The automatic cover principle is unchanged. If you have a private home insurance policy that includes fire cover, you automatically have NHCover. You do not need to buy it separately or opt in.
The natural hazards covered are broadly the same: earthquakes, landslides, volcanic activity, hydrothermal activity and tsunami, plus fire caused by any of these. Storm and flood damage is still covered for residential land only. Storm and flood damage to the home itself is covered by your private insurer.
Contents are still not covered. EQC stopped covering household contents on 1 July 2019, well before the NHI Act, so contents are covered only by private contents insurance.
The levy system continues to operate in the same way. Your private insurer collects the natural hazard levy as part of your premium and passes it on to Toka TÅ« Ake. The levy funds the Natural Hazard Fund, which pays for claims.
The fundamental two-layer structure - Toka TÅ« Ake provides the first layer of cover, your private insurer covers costs above the cap - remains in place. The NHI Act improved the mechanics of how this works, but the basic architecture is the same.
For a broader overview of how the NZ insurance system operates, the Insurance Council of New Zealand provides comprehensive resources.
To see how NZ insurers stack up on price and cover, compare house insurance in NZ before you buy or renew.
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