InsuoraHow home insurance works in New Zealand
New Zealand home insurance has a unique two-layer structure. The first layer is EQC (Toka Tū Ake) — the government's Earthquake Commission — which automatically covers the first NZ$300,000 + GST of natural disaster damage (earthquake, volcanic eruption, hydrothermal activity, tsunami, and landslide) to residential buildings. Private insurance tops up above the EQC cap and covers non-natural-disaster perils (fire, theft, storm, burst pipes).
EQC (Toka Tū Ake): what it covers
EQC cover applies automatically when you hold a private home insurance policy with a NZ-registered insurer. You cannot buy EQC cover independently, and you cannot opt out if you have home insurance. The EQC levy (~NZ$480/year for buildings) is collected by your private insurer and passed to EQC. Note: EQC contents cover was abolished on 1 October 2022. Since then, EQC covers buildings only — contents are covered entirely by your private insurer.
EQC covers (up to the cap) damage from:
- Earthquake (including aftershocks, ground settlement, landslide triggered by earthquake)
- Volcanic eruption
- Hydrothermal activity
- Tsunami
- Landslip (natural earth movement, not poor drainage or erosion)
- Storm or flood damage to land only (not the dwelling)
EQC does not cover: fire, theft, storm or flood damage to the building (that is your private policy), contents of any kind (EQC contents cover was abolished 1 October 2022 — all contents cover is private), or damage to vehicles.
Following the Canterbury earthquake sequence, EQC introduced a single-event cap per property: you get one EQC claim per property per natural disaster event, up to the cap. For a subsequent earthquake affecting the same property in a different event, the cap resets.
Earthquake risk by region
- Wellington
- The highest urban earthquake risk in New Zealand. The Wellington Fault, running through the centre of the city, is capable of a magnitude 7.5 earthquake. A major Wellington earthquake is considered likely within the next few hundred years and could cause widespread damage — including significant loss from building collapse in the CBD and outer suburbs. Wellington home insurance premiums reflect this risk and are the highest of any NZ city. Some insurers have quietly reduced new policy capacity in Wellington.
- Canterbury (Christchurch)
- The 2010 (M7.1) and 2011 (M6.3) Canterbury earthquakes caused 185 deaths and over NZ$40 billion in damage — New Zealand's costliest natural disaster. Canterbury premiums remain elevated post-event, though the multi-year EQC resolution process was largely completed by 2022. New builds under post-2011 strengthened building codes attract lower loadings from some insurers.
- Hawke's Bay
- Cyclone Gabrielle (February 2023) caused catastrophic flooding in the Esk Valley, Wairoa, and parts of Napier — NZ's most costly weather event. Many properties in flood plains face difficulty obtaining affordable cover, and some have been non-renewed by insurers. The region also has significant earthquake risk (the 1931 M7.8 Hawke's Bay earthquake killed 256 people and destroyed Napier).
Insurance availability crisis
New Zealand is experiencing a growing home insurance availability problem. Following multiple catastrophic events and global reinsurance price increases, some insurers have:
- Declined to write new policies in certain Wellington, Hawke's Bay and coastal flood-prone suburbs
- Applied premium increases of 50–100%+ at renewal for high-risk properties
- Removed or capped natural disaster cover (beyond EQC) for high-risk addresses
- Introduced lower sum-insured caps in certain postcodes
The NZ government and ICNZ are working on long-term solutions, but in the near term, properties in high-risk zones face a shrinking market. If your property is in a high-risk area, use an independent broker who can approach specialty markets on your behalf.
Frequently asked questions
- Is this calculator free?
- Yes — completely free, no account needed. Nothing you enter is saved.
- What sum insured should I choose for my building?
- Your building sum insured should reflect the full cost to demolish, clear the site, and rebuild your home from scratch — not its market value. NZ rebuild costs rose approximately 50% between 2020 and 2024 due to construction inflation. As a rough guide, budget NZ$3,000–$4,500/m² of living space for standard construction in most regions, more for complex or heritage buildings. BRANZ (Building Research Association of NZ) and some insurers provide online rebuild cost calculators. Review your sum insured annually.
- My insurer non-renewed my policy. What are my options?
- Contact an independent broker immediately — they have access to non-standard and specialty markets that direct consumers cannot access. Tower, Vero, and AMI (State) are the most active NZ home insurers by policy count; FMG serves rural properties well. If you genuinely cannot obtain cover, contact the Insurance Council of NZ (insurancecouncil.co.nz) or your MP — this is an emerging political issue with potential government intervention under discussion.
- Do I need to tell my insurer about renovations?
- Yes — always notify your insurer of significant renovations that increase the rebuild value of your property (new kitchen, bathroom addition, extension). Failure to update your sum insured could leave you underinsured. Some insurers also need to know about renovations to assess any change in risk (e.g. adding a wood burner may affect fire risk assessment).