What is EQC and how does it work?

It can get pretty confusing dealing with EQC and your insurer and trying to work out who does what.  I've been helping people run the claims against EQC and insurance companies since 2014, so here's a short explainer on some of the basics:

1. EQC insures your land and your house.

2. Your insurance company only insures your house.

To properly understand how this all works the first thing to do is to separate the information about your insurance claims into two different headings: “Land Damage” and “Building Damage”.

Land Damage

EQC insures damage to your residential land.   There are some quirks to it, but essentially residential land is the land that sits under your house and the land within eight metres of your house.  EQC does insure other land but I'm just trying to keep this really simple in this article.

EQC settles claims for land damage by paying money. The amount of money that the EQC will pay is either:

1. The value of the land affected or

2. The cost to repair the damaged land.

Whichever is cheaper.

Building Damage

EQC pays for the first chunk of the repairs if your home is damaged in a natural disaster. The amount that EQC must pay depends on when your insurance policy was last renewed.  Don't get too bogged down on that issue.  Basically, EQC must pay either $172,500 or $350,000 to fix your house.  Those amounts are what is known as the “EQC cap” for a building claim.  The EQC cap is the most that EQC will pay to fix your house.  If it costs more than the EQC cap to fix your house, then your insurance company pays the amount over the EQC cap.

The most your insurer will pay to fix your house is the sum insured.  The sum insured is noted on your insurance policy schedule and the document that your insurer sent you with the invoices to pay your insurance premiums.

Summary

Although it can be a bit complicated, remember to separate your claims into “Land Damage” and “Building Damage” and to think about the four questions:

1. What is the damage?

2. How do you fix it?

3. How much will it cost?

4. Who pays?
   

Give us a call 021 225 7316 or an email andrew@dempseyferguson.co.nz or complete the form at www.dempseyferguson.co.nz if you need a hand with your insurance claim.