Not just earthquakes: The Natural Hazards Committee gets a new name – the Natural Hazards Committee

A landslide in Titirangi during the Auckland floods in January 2023. Photo: RNZ/Samuel Rillstone

Clarification – The Toka Tū Ake Natural Hazards Committee has taken over the Earthquake Committee (EQC) with the aim of simplifying the process for claimants.

The new name comes after a legal change last year aimed at making it easier and faster for homeowners to claim if their property is damaged by a specific natural hazard.

The new legislation reflects the commission's role in helping prepare for and recover from a range of natural hazards – earthquakes, tsunamis, landslides and floods.

“We don’t just cover earthquakes,” said Tina Mitchell, the agency’s chief executive.

The government reformed the legislation after an Environment Quality Authority review and public inquiry in 2020 found it was ill-prepared for the Canterbury earthquakes.

Why are changes necessary?

“It's been a decade since the Canterbury earthquakes, and yet we've had about 50 reviews as an organisation because the process in Canterbury was really hard on people,” Mitchell told Nine to Noon.

“The amount of financial coverage was good, but the process took a long time and was really stressful and frustrating.”

The government's natural hazards insurance system, which has been in place for nearly 80 years, provides basic coverage for damage to insured property caused by a range of natural hazards.

Coverage under the scheme remains largely the same under the new law with some changes to clarify coverage and rights.

Mitchell said the legislation creates a clearer process for excess claims and calculations for retaining walls, bridges and drainage channels.

Homeowners will also get increased coverage for mixed-use buildings, such as apartments in commercial buildings.

Homeowners are eligible for this program if they have an insurance policy that covers fires. The premiums paid to insurance companies include the natural hazards insurance fee, which is the amount that homeowners pay for this coverage.

What are the major changes to the NHC?

One of the major changes for homeowners is the ease with which they can file claims.

Mitchell said that after the Canterbury earthquake, anyone who wanted to make a claim had to go through the EQC process, which could take about a year, and then have to go back and start the process again with their insurer. She said this made it complicated because the claimant had to deal with two assessors and claims managers.

“Our operating model now is a one-stop shop, you just call your insurance company, they handle everything, and we work with the insurance companies in the background.”

She said filing claims on bridges, culverts and retaining walls has also been simplified with an increment of $500 each time, whereas previously the increment was tied to the value of the assets.

Homeowners will also get increased coverage for mixed-use buildings, such as apartments in commercial buildings.

She said the claims manager at the private insurance company would speak directly with the homeowner.

For example, if damages are assessed at $320,000, the National Hurricane Center would pay $300,000 of that, with private insurance covering $20,000, she said.

She said some additional dispute resolution protections have been added for claimants who may wish to file a complaint about their claims.

She added that the organization is also working to strengthen its role in “research and resilience” because it is “key to preventing harm from actually happening in the first place.”

How do I file a claim?

Homeowners are eligible for this program if they have an insurance policy that covers fires. The premiums paid to insurance companies include the natural hazards insurance fee, which is the amount that homeowners pay for this coverage.

If there was a landslide, for example, you would call your insurance company who would record the details, likely ask you to take photos, inspect the site and then decide whether it was a landslide or a flood, Mitchell said.

“If it’s a landslide, the Natural Hazards Commission is responsible for the first $300,000 of damage to the home…anything over $300,000 — that’s where your insurance comes in.

“Then if the land is damaged by that landslide, we are one of the few countries in the world that covers land through the Natural Hazards Commission, but it is limited because you know the land is complex, and imagine the fees if we covered everything. So it's about an area of ​​eight metres around the house and 60 metres of your driveway.”

She said the insurance never covered all risks, and only made one contribution.

“The reality is that people need to understand the risks of the property they live in, and there are a lot of things you can do to improve and mitigate the risk of damage occurring in the first place.”

What if I want to file a complaint about this process?

She said that in the first instance the complainant would have to go to the complaints team of his insurance company.

“If it doesn't get resolved there, they'll talk to us.” [NHC]“We have an independent dispute resolution system called Fair Way, which has a lot of experience in the ACC space as well. You get an independent look at it, it's free to the homeowner and it's independent.”

How is the Natural Hazards Committee funded?

Until now, every insured homeowner paid a tax to fund the Environmental Quality Control Authority, and that tax will now go to the Natural Hazards Commission.

Mitchell said the maximum tax is $480 and people who pay the tax are able to file claims.

“We also use that money to invest and grow the fund, we buy reinsurance globally, we have about $9 billion of access there and finally we use it to invest in science and research so we can improve safety and protection.”

She said the commission used about half of the money it received from homeowners' fees to buy reinsurance.

“The good news is that we are actually in the top five countries in the world for reinsurance programmes. The reinsurance markets like the fact that New Zealand understands the risks it faces, models them well and makes efforts to mitigate them.”

She added that the size of the natural disaster fund currently amounts to about $300 million.

“We have the Crown Guarantee as part of our legislation.”

She added that last year's severe weather events had a greater financial impact on private insurance companies than the National Hurricane Center.

“It's about what we cover, in case of flood or weather, in case of flood we only cover a limited part of the land, if it's a landslide we cover the house and the land.”

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