The Earthquake Commission will receive $50m + GST in funding this Thursday [1 November] from the Government under the Crown Guarantee.
Chief Executive Sid Miller says that the funding will provide financial support for EQC and gives certainty for customers that claims will continue to be settled.
“The Natural Disaster Fund (NDF) has been exhausted as we continue settling claims for Canterbury and Kaikoura earthquakes and other natural disaster events that have occurred around New Zealand.
“The grant was provided to EQC under Section 16 of the EQC Act, and this ensures that financial support available to EQC to enable it to cover its costs as we work with Government to reseed the NDF.”
Mr Miller says that EQC forecasts that the funding requirement up to $170 million spread over 2019 and 2020. The actual amount will depend on issues such as the speed with claims are settled, received, and the outcome of litigation cases.
“The Crown has always had the mandate to provide financial support for EQC under Section 16 the EQC Act, and this has been a possibility that EQC has discussed with Government since the 2011 earthquake. In 2011, the previous Government informed the EQC Board that it was likely that the Guarantee would be called on due to the huge number of claims that had been lodged and we have reported on this in our Annual Reports.
EQC will work to rebuild its resources and the Natural Disaster Fund while the Guarantee maintains the financial footing for the EQC Scheme.
“The EQC scheme provides first loss insurance cover for residential dwelling, contents and land damage caused by certain natural hazard for around 1.74 million New Zealand residential dwellings.
“The costs and benefits of the scheme are shared across New Zealand homeowners. The key principle is that homeowners should not be disadvantaged due to their location, or because they may have suffered a loss in a natural disaster and lodged a previous EQC claim, for that event.
“The scheme underpins the insurance industry in New Zealand and is there to help homeowners and communities recover after a natural disaster. Having the Guarantee in place means that support and assistance are there for future homeowners as well,” says Mr Miller.
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