Why does a homeowner have to pay the EQC dwelling claim excess and then a private insurer excess? ?Doesn't a comprehensive insurance policy cover the cost of the EQC excess?
Asked: 25 October 2015
Insurance Council of New Zealand (ICNZ) advises:
Homeowners throughout NZ have in effect two policies for insurance. One with EQC and one with their private insurer and the relevant excesses apply in both cases.
EQC also covers some land within a property.
It is important for policyholders to understand that their insurance does not provide cover for what is covered by the Earthquake Commission, the value of the excess is part of this cover. The customer is liable for all excesses, insurance and EQC.
Policyholders can find a term regarding this, typically under ‘what is not covered’ within their policy. Below is the standard as used by IAG:
You are not covered for loss to the extent it is covered by the Earthquake Commission Act or that would have been covered but for:
Where the Earthquake Commission agrees to cover it, but your loss exceeds the Earthquake Commission payment, the most we will pay is the difference between what the Earthquake Commission pays, or would have covered, and your maximum entitlement under this Home Policy