Earthquake damage: who pays?

Earthquake cover for an insured New Zealand home is a sandwich. The bottom layer is natural hazards cover from the Natural Hazards Commission Toka Tū Ake, which attaches automatically to any home policy that includes fire and pays for building damage up to the cap, currently $300,000 plus GST per event. The top layer is your own insurer, who covers damage above the cap up to your sum insured. Contents have no NHC layer at all: a broken television is a private insurance claim or no claim.

Lodge with your private insurer as soon as you reasonably can. The insurer assesses the damage and manages both layers, so you deal with one organisation rather than two. Photograph everything before any cleanup, keep damaged items where safe, and limit early work to what is needed to make the house safe and weathertight, keeping receipts for all of it. Settlement may be cash or a managed repair depending on your policy and the damage, and large claims can move slowly, which is a reason to document well from the first day.

Earthquake damage is rarely confined to the house. NHC land cover applies to insured residential land, broadly the ground under and around the home and parts of the main access way, and there is some cover for retaining walls, bridges and culverts that support or protect that land, all subject to its own limits and rules. Land claims are technical, and on sloping sections they can matter more than the building claim, so make sure land damage is in the lodgement and not just the cracked plaster.

Natural hazards cover only exists alongside a private policy that includes fire cover. An uninsured house loses both layers at once, which after a major earthquake means bearing the loss personally. Most mortgaged homes are insured because lenders require it, but a policy that has lapsed, or a sum insured that has drifted far below rebuild cost, quietly recreates the same exposure one layer at a time.

Start with the insurer's internal review and put your position in writing with your evidence attached. Beyond that, insurers belong to independent dispute resolution schemes, and NHC decisions have their own review paths. Where the gap is large, an independent engineer's report or legal advice earns its fee; the Canterbury experience taught homeowners to keep every assessment, scope and letter, because earthquake claims are won and lost on paper.