Government has outlined the changes it wants to make to insurance cover after natural disasters, including a doubling of the cap on building cover to $200,000.

The Earthquake Commission Act is being reformed, and a discussion paper on the proposed changes has been released today.

Earthquake Commission Minister Gerry Brownlee said the reforms would ensure the EQC remained focused on rebuilding homes and would resolve the difficulties experienced in Christchurch with regard to land and building cover.

The changes would also better integrate EQC and private insurers' claim handling processes and ensure the natural disaster insurance scheme remained sustainable.


Among the key proposals was increasing the cap on EQC building cover from $100,000 to $200,000.

At present, the EQC is responsible for up to $100,000 of damage to residential properties from a single event. Anything above that threshold becomes the responsibility of private insurers.

The cap has caused significant friction and uncertainty for homeowners affected by the Christchurch quakes.

Raising the threshold would massively reduce the interaction between EQC and private insurers, and was expected to lead to lower premiums being charged by insure companies.

Ministers proposed that EQC should not provide land cover after a natural disaster unless it was impossible to rebuild on the site.

That meant EQC would no longer cover land damage that had not affected the house itself.

It was also proposed that EQC would no longer provide contents insurance. Ministers said leaving contents insurance to private providers would enable the commission to focus on insuring homes and would eliminate uncertainty regarding contents claims.

Other proposals included a requirement for homeowners to lodge all EQC claims with their private insurer first.


The insurer would validate the claim before sending it to the EQC, in a bid to reduce "information churn" between the private sector and the commission.

Government was now seeking submissions on the proposals, before introducing a bill to Parliament in early 2016.

No current claims would be affected by the proposals.