The newly enacted Natural Hazards Insurance Act effective from July 1st, reflects a broader mandate to encompass a range of natural disasters beyond earthquakes.
The Commission’s Chief Executive, Tina Mitchell, emphasises that the legislative update is designed to modernise and strengthen their ability to mitigate the impact of natural hazards across the country.
Mitchell highlights that while the Act maintains the core coverage for insured properties against various natural disasters like tsunami, landslides, volcanic activity, earthquakes, and geothermal events, it also enhances clarity on entitlements and improves the claims process for homeowners. This includes extending coverage to mixed-use buildings such as apartments in commercial spaces.
New Zealand faces substantial exposure to natural hazards, compounded by the effects of climate change which intensify risks like rising sea levels and more severe weather patterns. Mitchell underscores the timeliness of these improvements, stating that they are essential as the country braces for potentially more extreme weather events in the future.
The government’s proactive stance on climate adaptation is evident in recent initiatives. The Finance and Expenditure Committee has been tasked with developing a framework to manage the risks and costs associated with future extreme weather events. This initiative aims to establish clear objectives and principles for climate adaptation, ensuring a coordinated national approach.
Associate Finance Minister David Seymour has affirmed that these legislative changes are informed by past events such as the Christchurch earthquake and recommendations from the Public Inquiry into EQC. He acknowledges the resilience shown by New Zealanders in the face of adversity and emphasises the government’s commitment to continuous improvement based on feedback and lessons learned from claimants’ experiences.
Seymour has initiated a review of the financial and levy settings for natural hazards, underscoring the importance of managing the financial position of the Natural Hazard Fund and the broader Crown finances. The current levy structure, collecting 16 cents per $100 of EQ Cover, remains intact pending the outcome of the Treasury’s review. Seymour assures that any decisions regarding levy adjustments will prioritise the fund’s sustainability and uphold the government’s guarantee to ensure successful claims are honored.
In summary, New Zealand’s legislative reforms underpin a proactive approach to natural hazard management and climate adaptation. By expanding the scope and enhancing the efficiency of insurance coverage, the government aims to better protect homeowners and mitigate the economic impact of future natural disasters. As the nation prepares for an uncertain climate future, these measures signify a commitment to resilience and preparedness in the face of evolving environmental challenges.
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