Looser restrictions on contents cover

Insurance companies are loosening up their restrictions on new insurance polices for contents in earthquake-hit areas from North Canterbury to Wellington, but house insurance is still restricted.

Restrictions were placed on new policies last November after the 7.8 magnitude Kaikoura earthquake.

This has meant that prospective house buyers could not insure their homes unless they took over the previous owner's policy, reported Radio NZ.

Mr Tim Grafton, Chief Executive of the Insurance Council of New Zealand (ICNZ), said that most insurers are not taking on new cover because of regular seismic activity.

He said restrictions are gradually easing for those looking to take over a lease, once the building has been tested for weather-tightness and earthquake damage.

Meanwhile, ICNZ announced today that private insurers have paid out nearly NZ$2.7 billion (US$1.9 billion) in 2016 to settle commercial and residential claims resulting from the 2010 and 2011 Canterbury earthquakes. Of this total, NZ$1.6 billion was for domestic claims and NZ$1.1 billion was commercial claim payments.

Mr Grafton said that “insurers have now fully settled NZ$19.4 billion, or 86% of over cap residential Canterbury earthquake claims and 95% of all residential property claims. Over 95% of commercial claims have now been settled”.

Separately, the government's Earthquake Commission (EQC) has received 26,875 claims following the close of the three-month deadline to 14 February for lodging claims for last year's Kaikoura earthquake.

EQC's Acting General Manager Customer and Claims John Johnston said that the commission is working with insurers to receive the remaining claims that were lodged with them and not yet received by EQC. The final number is expected to increase.

The Kaikoura quake is the second largest event that EQC has responded to after the 2011 Canterbury earthquakes. Claims are expected to exceed NZ$1 billion.

 - E-daily