A New Name for a Familiar Scheme
From 1 July 2024, New Zealand's Earthquake Commission (EQC) became the Natural Hazards Commission Toka Tū Ake (NHC). This was no mere rebrand — it was the most significant reform to New Zealand's residential natural hazards insurance scheme since 1993, triggered by lessons from the Canterbury earthquake sequence and the 2020 Public Inquiry into EQC.
The Māori name Toka Tū Ake means "the foundation from which we stand strong, together" — a phrase that captures the pooled, community-funded nature of the scheme. If you own a home in New Zealand, understanding what changed matters directly to how your insurance claim would be handled.
What Is the Natural Hazards Commission?
Like its predecessor, the NHC is a Crown entity that provides the first layer of insurance cover for residential properties against natural hazards. It is funded by a levy embedded in every residential buildings insurance premium — currently NZ$480 per year. The NHC absorbs initial losses so that private insurers only need to cover damage above the cap, which helps keep private insurance available and affordable across New Zealand.
Cover now extends to earthquakes, volcanic eruptions, tsunami, geothermal activity, storms, floods, and landslides. The new name better communicates this full scope — many homeowners previously assumed cover was limited to earthquakes alone.
The Building Cover Cap: Still $300,000
One of the most important things to understand is that the building cover cap remains $300,000 plus GST per insured dwelling. This applies to damage occurring on or after 1 July 2024. For damage that first occurred before that date, the old EQC Act still governs.
This cap means that if your home requires more than $300,000 to rebuild after a natural hazard event, your private buildings insurer covers the shortfall — which is exactly why maintaining an adequate buildings insurance policy is non-negotiable.
The Biggest Change: A Flat $500 Excess
Under the old EQC Act, the excess for a building claim was 1% of the total settlement, with a minimum of $200 and a maximum of $3,450. For a $200,000 claim, that meant a $2,000 excess.
Under the NHI Act 2023, the excess for building claims is now a flat $500 per insured home. This is a significant simplification and, for most homeowners, a meaningful reduction in out-of-pocket costs when making a claim. The land claim excess is also $500, with a maximum of $5,000 for buildings with more than ten insured homes.
New Complaints and Dispute Resolution Rights
One of the clearest improvements from the Canterbury experience is a stronger framework for homeowners who disagree with a claim outcome. The new Act introduced:
- A Code of Insured Persons' Rights — sets the standard of service you can expect during a claim
- NHCover Dispute Resolution service — a free, independent service provided by Fair Way for disputes about NHCover claim outcomes
- An independent review system — available when homeowners feel the Code has not been followed
These pathways avoid the cost and delay of court proceedings, which proved to be a major source of distress for Canterbury claimants.
Other Notable Changes Under the NHI Act
Heating Is Now a Covered Essential Service
The NHI Act expanded the list of essential services covered to include heating. Under the old EQC Act, water supply, drainage, sewerage, gas, electricity, and telephone services were covered. Heating is now added to this list.
Mixed-Use Buildings Get Better Protection
Apartment owners in mixed-use buildings (e.g., residential units above commercial premises) will find it easier to qualify for full NHCover under the revised 50% threshold criteria. Buildings that don't meet the threshold now receive proportionate cover for common and joint property — previously they received nothing.
Retaining Walls and Land Cover Clarifications
Retaining walls, bridges, and culverts may now be covered even when located outside the property boundary, provided the homeowner has an insurable interest (e.g., through a licence to occupy). The land cover cap for retaining walls is $50,000 plus GST, and $25,000 plus GST for bridges and culverts — with the NHI Act using undepreciated value rather than indemnity value for these structures.
What Hasn't Changed
Despite the reforms, several fundamentals remain constant:
- NHCover is automatic for any homeowner with a valid private buildings insurance policy
- Claims for natural hazard damage are lodged through your private insurer, who coordinates with the NHC
- The land cover area remains 8 metres around the home, plus up to 60 metres of driveway
- The $300,000 building cap is unchanged
- The annual levy is currently NZ$480
What This Means for Your Buildings Insurance
The NHC reforms don't change the core reason every NZ homeowner needs private buildings insurance: the NHC cap is a floor, not a ceiling. If your home costs more than $300,000 to rebuild — and the majority of family homes in Auckland, Wellington, and Christchurch now do — your private insurer covers the difference.
Review your sum insured annually to ensure it reflects current rebuild costs. Construction material costs in New Zealand rose sharply through 2022–2024, and many policies set years ago are now underinsured by tens of thousands of dollars. Talk to one of our advisers to ensure your cover is adequate and properly coordinated with NHCover.
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James Thornton
Insurance expert with extensive knowledge of New Zealand property protection and buildings insurance coverage.
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