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EQCoverA n i n s u r e r ’ s g u i d e
S e p t e m b e r 2 0 1 2
The provisions of the Earthquake C o m m i s s i o n A c t 1 9 9 3 a n d Regulations will always prevail over the contents of this Insurer's Guide. You should always refer to the Act when determining issues involving the Act.
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EQC Contacts 3
EQCover 4
{ What is EQCover? 4
{ Housecover("residentialbuildings") 4
{ Contentscover("personalproperty") 5
{ "Residentialland"cover 6
{ EQCoverdiagram 7
{ Premium 8
{ Excesses 8
{ Section28oftheEarthquakeCommissionAct-CancellingEQCover 9
{ Section29oftheEarthquakeCommissionAct-GST 9
{ Section30oftheEarthquakeCommissionAct 9
MakingaclaimwithEQC 10
CalculatingEQCover 11
{ Dwellings(boardinghouses,fractionalownership, contractworkspolicies,showhomes) 11
{ PersonalProperty(inmultiplesituations,instorage,intransit, landlord'scontents,internationalstudents) 14
{ Mixedusageproperties 15
{ Bodycorporatebuildings 16
{ Resthomes 16
{ Retirementvillages&resthomecomplexes 17
{ Holidayaccommodation(motels,bedandbreakfasts,holidayhomes, servicedapartments,time-shares&caravans) 18
Offshoreplacements 20
EQCoverdirectwithEQC 20
PropertynotinsuredbytheEQCAct 21
Section74oftheBuildingAct2004 22
Contents
The provisions of the Earthquake Commission Act 1993 and Regulations will always prevail over the contents of this Insurer's Guide. You
should always refer to the Act when determining issues involving the Act.
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T r a i n i n g E n q u i r i e sShanneMorrissey LearningandDevelopmentManager([email protected])
Freephone 0800326243
P r e m i u m & E Q C o v e r E n q u i r i e sLeePatton ComplianceManager([email protected])
DDI (04)9016665
Freephone 0800326243
BrianBurney InsuranceSpecialist([email protected])
DDI 037419428
Freephone 0800326243
E Q C C o r p o r a t e O f f i c eLevel20,MajesticCentre
100WillisStreet
POBox790
Wellington6140
Phone(04)9786400
Fax(04)9786431
Claims0800326243or0800DAMAGE
Claimsfax(04)9786432
Websitewww.eqc.govt.nz
Contacts
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W h a t i s E Q C o v e r ?EQCoverisEQC’snaturaldisasterinsurancescheme.Itinsureshomes,certainlandandsomepersonal belongingsagainstnaturaldisasterdamagecausedbythefollowing:
{ Earthquake { Landslip { Tsunami { Volcaniceruption { Hydrothermalactivity { Stormorflooddamage-TOLANDONLY { Firefollowinganyoftheabove
H o u s e C o v e r ( " r e s i d e n t i a l b u i l d i n g s " )EQCinsures"residentialbuildings",whichisatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993,whenthoseresidentialbuildingsareinsuredunderacontractoffireinsurance.A"residentialbuilding"isanybuilding,orpartofabuilding,orotherstructurewhichcomprisesorincludes1ormoredwellings,iftheareaofthedwellingordwellingsconstitutes50%ormoreofthetotalareaofthebuilding,partorstructure.
ResidentialbuildingsareinsuredunderEQCoverfortheirreplacementvalue,upto$100,000pereventforeach"dwelling"inthebuilding.Propertyownerscangettop-upcoverfromprivateinsurerstoinsureagainstnaturaldisasterdamagetothebuildingabovetheEQClimit.
Anybuildingorpartofabuildingprovidinglong-termaccommodationfortheelderlyisalsoa"residential building"iftheareaofthebuildingprovidinglong-termaccommodationfortheelderlycomprises50%ormoreofthetotalareaofthebuilding,partorstructure.
Certainservices(suchaswatersupplyservicesandgasservices)ownedbytheownerofthebuilding(ortheownerofthelandonwhichthebuildingissituated)arealsoincludedwithintheEQCcoverforthe"residentialbuilding",butonlywherethoseservicesarewithin60metresofthebuilding.
Outbuildingsandappurtenantstructures(suchasgaragesandgardensheds)whicharecoveredunderthehousepolicyarealsoincludedwithintheEQCcoverforthe"residentialbuilding",wheretheyareusedforthepurposesofthehousehold.
Whetherabuildingisa"residentialbuilding"asdefinedmustbedeterminedwheneveracontractoffireinsur-anceinrespectofthatbuildingismadeandeverytimethatthecontractoffireinsuranceisrenewed.Ifabuild-ingisa"residentialbuilding"whenthecontractoffireinsuranceismadeorrenewed,EQCoverforthebuildingwillcontinue,evenifthebuildingnolongermeetsthedefinitionof"residentialbuilding",untilthefirepolicylapsesoriscancelledorEQCoverforthebuildingiscancelled.
Ifwhenthecontractoffireinsurancecomestoanend,whetherforrenewalorotherwise,thebuildingnolongermeetsthedefinitionof"residentialbuilding",EQCoverwillnotcontinueforthebuilding.
EQCover
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D e f i n i t i o n o f “ r e s i d e n t i a l b u i l d i n g ”Theterm"residentialbuilding"isdefinedinsection2(1)oftheEarthquakeCommissionAct1993.A"residentialbuilding"isanypremisesthatareself-containedandthataresomebody'shomeorholidayhomeorthatarecapableofbeing,andareintendedbytheownertobe,somebody'shomeorholidayhome.
Residentialbuildingsinclude:
{ Houses { Flats { Apartments { Holidayhomes
Servicedapartments,motelunits,hotelroomsandboardinghouseroomsarenotcovered.However,staffandthemanager'saccommodationarecovered-that'swheretheylive,sotheyareresidentialbuildings.
W h a t a r e " s e l f - c o n t a i n e d " p r em i s e s ?Self-containedpremisescontainallfacilities(living,sleeping,cookingandbathing)fortheoccupant(s)toliveinaself-sufficientmanner.Premisesarenotself-containedwheresomeessentialfacilities(suchascookingorbathingfacilities)havetobesharedbetweendifferenthouseholds.
Thesefacilitiesdonothavetobeintheonestructurebuttheymustbefortheexclusiveuseofasingle household.Forexample,thepropertymayhaveahousethatonlyhasliving,sleepingandkitchenareaswiththeablution(bathing)buildinginthegrounds.Asthewholepropertyhasthefacilitiestoenabletheoccupyinghouseholdtoliveinaself-sufficientmannerandthefacilitiesarenotsharedwithotherhouseholds,thesewillbe"self-contained"premisesforEQCpurposes.
B o r e sIfthewatersupplyforthedwellingissuppliedfromabore,EQCcoversonlyphysicallossordamagetotheboreitselfcausedbyaqualifyingnaturaldisaster,andonlyiftheboreislocatedwithin60mofthedwelling.Achangeinthewaterqualityorthedisappearanceoftheaquifer(watercourse)isnotcoveredbecauseitdoesnot involvephysicallossordamagetotheinsuredproperty(thebore).
C o n t e n t s C o v e r ( " p e r s o n a l p r o p e r t y " )EQCinsuressomepersonalbelongingsas"personalproperty",whichisatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993,whenthatpersonalpropertyisinsuredunderacontractoffireinsurance.PersonalpropertyisinsuredunderEQCoverforitsreplacementvalue(or,ifitisinsuredagainstfireonanylessfavourablebasis,onthatbasis),upto$20,000.
"Personalproperty"isdefinedintheActas"propertythatislocatedinoronaresidentialbuilding;andincludespropertythatisusuallysolocatedbutistemporarilyremovedfromthebuildingforanyreason;butdoesnotincludeanypropertyusedsolelyorprincipallyforcommercialpurposes".
Inthelistofexclusions(seepage21)thefollowing,whileinsuredbyaprivateinsurerunderacontractoffireinsurance,arenotcoveredbyEQC:
{ Worksofart-generallyworksofartthatareone-offitemsandarethosewhoseprimefunctionisdecorativeorcommunication,andwhichareanartist'soriginalwork(whichmaybepaintings,ceramics,glassorothermediums)
{ Anymotorvehicle-avehicledrawnorpropelledbymechanicalpowerandanypartsoraccessoriesofa
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motorvehicle.Underthisexclusion,coverofitemssuchasmobilityscooters,motorisedwheelchairs,orscootersareexcluded
{ Anyjewellery,preciousstones,money,securities,documentsorstamps.
" R e s i d e n t i a l L a n d " C o v e rWherearesidentialbuildingisinsuredunderEQCover,the"residentialland"onwhichthatbuildingissituatedisalsoinsuredunderEQCover.Accordingly,barelandisnotcovered.
EQCoverforresidentiallandisnotincludedintheEQCcapof$100,000thatappliestoresidential buildings,butisadditionalandseparate.
"Residentialland"isatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993asfollows:
Residential landmeans,inrelationtoanyresidentialbuilding,thefollowingpropertysituatedwithintheland
holdingonwhichtheresidentialbuildingislawfullysituated:
(a) Thelandonwhichthebuildingissituated;and
(b) Alllandwithin8metresinahorizontallineofthebuilding;and
(c) Thatpartofthelandholdingwhich-
(i) Iswithin60metres,inahorizontalline,ofthebuilding;and
(ii) Constitutesthemainaccesswayorpartofthemainaccesswaytothebuildingfromthe
boundaryofthelandholdingorislandsupportingsuchaccesswayorpart;and
(d) Allbridgesandculvertssituatedwithinanyareaspecifiedinparagraphsa)toc)ofthisdefinition;and
(e) Allretainingwallsandtheirsupportsystemswithin60metres,inahorizontalline,ofthebuilding
whicharenecessaryforthesupportorprotectionofthebuildingorofanypropertyreferredtoinany
ofparagraphs(a)to(c)ofthisdefinition.
Section19oftheEarthquakeCommissionAct1993setsoutthebasisonwhichresidentiallandisinsured:
SubjecttoanyregulationsmadeunderthisActandtoSchedule3,wherearesidentialbuildingis
deemedtobeinsuredunderthisActagainstnaturaldisasterdamage,theresidentiallandonwhichthatbuilding
issituatedshall,whilethatinsuranceoftheresidentialbuildingisinforce,bedeemedtobeinsuredunderthis
Actagainstnaturaldisasterdamagetotheamount(exclusiveofgoodsandservicestax)whichisthesumof,inthe
caseofanyparticulardamage,-
(a) Thevalue,atthesiteofdamage,of-
(i) ifthereisadistrictplanoperativeinrespectoftheresidentialland,anareaofland
equaltotheminimumareaallowableunderthedistrictplanforlandusedforthe
samepurposethattheresidentiallandwasbeingusedatthetimeofthedamage;or
(ii) anareaoflandof4000squaremetres;or
(iii) theareaoflandthatisactuallylostordamaged-
whicheveristhesmallest;and
(b) Theindemnityvalueofanypropertyreferredtoinparagraphs(d)and(e)ofthedefinitionoftheterm
"residentialland"insection2(1)thatislostordamaged.
.
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Retainingwallsthatarenecessaryforthesupportorprotectionoftheresidentialbuildingortheinsuredland,includingthemainaccessway,areinsuredifwithin60metresinahorizontallineofthebuilding.
Bridgesandculvertsareinsurediftheyarewithin8metresina
horizontallineofbuildingsorwithin60metresinahorizontallineiftheyformpartofthemainaccessway.
Dwellings,personalpropertyand
outbuildingsareinsured.
Landwithin60minahorizontallineofthehousewhichforms
themainaccesswayisinsured(butnotartificial
surfacesthereon).
Landunderthebuildingsandwithin8metresinahorizontallineofthebuildingsisinsured(butnotartificialsurfacesthereon).
Landareanotinsured.
Watersupplyservices(includingbores),drainage,sewageandgaspipes,telephoneandelectricity
lines.Maximumlengthinsuredupto60metresinahorizontalline
fromthebuilding(ifownedbytheownerofthedwellingortheland).
EQCoverdiagram
Mul t i p l e a c c e s sw a y sIftheresidentialbuildinghasseveralaccessways(drivewaysand/orpathwaysand/orseparatedriveways)onlythemaindriveway(orpathwayifthepropertydoesnothaveadriveway)iscovered,upto60minahorizontallinefromthebuilding.
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P r e m i u mForcontractsoffireinsurancemadeonorafter1February2012,EQCovercostsfifteencentsforevery$100insured(0.15%)wheretheperiodofinsuranceisoneyear.Themaximumforaone-yearperiodis$150forcoverof$100,000onthedwellingand$30forcoverof$20,000onpersonalbelongings.
Wheretheperiodofinsuranceisotherthanoneyear,aprorataproportion(onadailybasis)oftheamountthatwouldbepayableforaone-yearperiodispayable,roundedtothenearest5cents.
Coverforlandisincludedatnocost.
E x c e s s e s
P r o p e r t i e s c o n t a i n i n g o n l y o n e dwe l l i n g
P r o p e r t i e s c o n t a i n i n g m o r e t h a n o n e dwe l l i n gBuildings-
{ $200multipliedbythenumberofdwellingsinthebuildingor1%oftheamountpayable,whicheveristhegreater.
Land-
{ $500multipliedbythenumberofdwellingsintheresidentialbuildingwhichissituatedontheland,or10%oftheamountpayable,whicheveristhegreater,toamaximumof$5,000.
Damagetobothadwellingandpersonalproperty-
{ Whenapersonmakesaclaimfordamagetobothadwellingandpersonalpropertylocatedinthatdwellingandthedamageiscausedbythesamenaturaldisaster,asingleminimumpaymentof$200appliesacrossbothclaims.
E x c e s s - % o f c l a i m
M i n . p a y a b l e M a x . p a y a b l e
DwellingPersonalpropertyLand
1%-
10%
$200$200$500
$1,150$200$5,000
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S e c t i o n 2 8 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - C a n c e l l i n g o r L i m i t i n g o f E Q C o v e rA“Section28”noticeisplacedonapropertytitleifEQCoverhasbeencancelledorlimited.EQCcanonlycancelorlimitcoverinspecificcircumstancesassetoutinSchedule3oftheEarthquakeCommissionAct.EQCwill advise,inwriting,anypersonaffectedbythecancellationorlimitationofEQCoverandexplainwhyithasdoneso.Thenoticecontinuestoapplyevenifapropertyissold.
InmanycasesEQCovercanbereinstatedandthepropertyownerneedstocontactEQCtofindoutwhatwillhavetobedone,suchasremedialworks,inordertoreinstateEQCover.
S e c t i o n 2 9 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - G S TSection29(3)oftheEarthquakeCommssionAct1993containsthefollowingprovisionregardinggoodsandservicestax:
(3) WhereanypropertyisinsuredunderthisActforitsreplacementvalueandtheCommissionissatis
fiedthatgoodsandservicestaxhasbeenpaidorwillbepayablebyaninsuredinthecourseofreplac
ingorreinstatingtheproperty,theamountofanypaymentundersubsection(2)ofthissectionshallbe
increasedbytheamountofgoodsandservicestaxpaidorpayablebytheinsured.
Whereverinthisguideamonetaryamountisshownordescribed(coverorpremium)thenthatamountisex-cludingGST.
S e c t i o n 3 0 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - O t h e r I n s u r a n c eSection30oftheEarthquakeCommissionAct1993isheaded"InsuranceotherwisethanunderthisAct".It providescertainrulesforsituationswhere,upontheoccurenceofnaturaldisasterdamagetoproperty coveredbyEQCover,thepropertyisalsoinsuredagainstthatdamageunderacontractofnaturaldisaster damageprovidedbyaninsurancecompany.Theinsurancecompany'scovermightbeeither"groundup"coveror"topup"cover.
Wheretheinsurancecompanyhasprovidednaturaldisastercoverforthepropertybywayof"groundup"cover,theinsurancecompany,notEQC,isliabletopayforthedamagecoveredbytheinsurancecompany'snaturaldis-astercover.EQCoverwillrespondonlyforsomuchofthedamage(ifany)asexceedstheamountpayablebytheinsurancecompanyunderthecontractandtheexcessthattheinsuredpersonmustbearunderthecontract.
Wheretheinsurancecompanyhasprovidednaturaldisastercoverforthepropertybywayof"topup"cover-thatis,thecoverisinexcessoftheamountofEQCover-EQCoverappliesasnormal.The"topup"coverappliestoanydamagebeyondwhatiscoveredbyEQCover.
ItisimportanttobeawarethatincontractswhereEQCoverisinvolved,andthesemaybestraightdomesticpoliciesthroughtocommercialcontractsthathaveresidentialbuildingsonthem,itmustbemadeclearthattheinsurer'snaturaldisastercoverisoverandabovethatprovidedbyEQC.
TheEQCpremiumispayablewhereveracontractoffireinsuranceisenteredintoinrespectofa"residentialbuilding"or"personalproperty".Accordingly,theEQCpremiumispayableevenwherea"groundup" naturaldisasterpolicyhasbeenenteredintoforthatproperty,ifthecontractofinsurancealsoinsuresagainstfire.
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ClaimantsmustcontactEQCwithinthreemonthsofthedamagehappening. This three-month rule is pre-scribed by law and cannot be extended.
TheEQCfreephonenumberis0800326243or0800DAMAGE.ClaimscanalsobelodgedontheEQCwebsitewww.eqc.govt.nz.Itisbetterfortheclaimanttodothisratherthangettingtheirbroker,agentorinsurancecompanytocall.
EQCwillasktheclaimantforanideaoftheextentofdamageandwhomtheyareinsuredwith.EQCwilltellthemwhetheralossadjusterwillcalltohelpwiththeclaimorwhethertheycangoaheadwithgettingrepairsdone.EQCwillfollowthisupinwriting.
C l a i m a n t s c a n : { Maketemporaryrepairsforsafetyortopreventfurtherdamageordiscomfort. { Getessentialservicesliketoiletsandwatersystemsrepairedimmediately,buttheyshouldkeep,
documentorrecordeverythingtherepairerreplaces(andkeepacopyofthebill). { Cleanupspillagesorcrockeryandglassbreakages(buttheyshouldn’tthrowanythingnotperishableaway
yet). { Disposeofperishableslikeruinedorspiltfood.(Theyshouldlisttheitemsastheybury,burnordump
them.)
If possible, claimants should take photos before moving and repairing anything.
Any reimbursement for temporary or urgent repairs is, of course, subject to EQC acceptance of a valid claim. If accepted, the cost will be deducted from any total amount owed to you under EQCover.
EQCover is subject to the conditions specified in Schedule 3 of the EQC Act. Those conditions include various powers for EQC to decline (or meet part only of) a claim in specified circumstances.
MakingaClaimwithEQC
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D w e l l i n g s
EQCoverislimitedto$100,000foreach"dwelling"inaresidentialbuilding.Includedinthe EQCoverfortheresidentialbuildingiscoverforallappurtenantbuildingsandstructures,andforcertain servicestothatbuilding,thatarecoveredunderthefirepolicyforthebuildingandthatcomewithinthedefinitionof"residentialbuilding"insection2(1)oftheEarthquakeCommissionAct1993.
Theamountofinsuranceavailableforaresidentialbuildingistheleastofthefollowingamounts:
{ Ifthefirepolicyspecifiesareplacementsuminsuredforwhichthebuildingisinsuredagainstfire,theamountofthatsuminsured
{ IfthefirepolicydoesnotspecifyareplacementsumforwhichthebuildingisinsuredagainstfirebutdoesspecifyanamounttowhichthebuildingistobeinsuredundertheEarthquakeCommissionAct,thenthatamount
{ Theamountarrivedatbymultiplying$100,000bythenumberof"dwellings"intheresidentialbuilding
IfthefirepolicyspecifiesanamounttowhichthebuildingistobeinsuredundertheEarthquakeCommissionAct1993,thatamountmustbenolessthantheamountarrivedatbymultiplying$1,000bytheareainsquaremetresoftheresidentialbuilding.
EQCwillpayGSTifGSTispayablebytheclaimanttoreinstateproperty.
CalculatingEQCover
g a r a g e d w e l l i n g g r a n n y f l a t s h e d
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Forcoverotherthanthe$100,000perdwellingtoapply,theremustbeeitherareplacementsumspecifiedoranEQCsumspecified.Thesquaremetreformulacannotbeusedonanopen-endedreplacementpolicyunlessitexpresslystatesaparticularsumforwhichthepropertyisinsuredforEQCpurposes.
B o a r d i n g h o u s e s a n d /o r b u i l d i n g s w i t h i n d i v i d u a l l y r e n t e d r o om sInsomecaseslandlordssetupbuildings(sometimesformerdwellings)tobeaboardinghouseortoleaseoutroomsonanindividualbasis.TheusageofbothtypesofpropertiesandhowEQCrespondsissimilar.
Thesepropertieshave:
{ Residentswholeasetheirownnonself-containedroom, { Sharedcommunalfacilitiessuchaskitchenandbathrooms.
However,EQCoverDOESNOTAPPLYastheself-containedtestfailsbecause:
{ Eacharealeasedforthesoleuseoftheoccupierisnot"self-contained"becausesomeessentiallivingfacilitiesareshared
{ Thewholebuildingisnotbeingusedbyasinglehouseholdasahome
Ifthereisanon-sitemanagerwhousesoneofthenonself-containedrooms,againEQCoverDOESNOTAPPLY.
Replacementvalue=$250,000.Singledwelling.
Open-endedreplacementvalue,basedonareaof220m2.Singledwelling.NoreplacementsumorEQCsumspecified.
Indemnityvalue=$60,000.NoreplacementsumorEQCsumspecified.Singledwelling.
Dwellingwithaself-containedgrannyflatinsamebuilding.Replacementvaluefordwellingandflat=$250,000.
Dwellingwithaself-contained,detachedgrannyflat.Replacementvaluebasedonarea.Dwelling200m2,flat80m2.
$100,000
EQCoverislimitedtoamaximumof$100,000.
$100,000.
$200,000becausethebuildingcontainstwodwellings,providedbothdwellingsaredisclosedtotheinsurerwhenthecontractoffireinsuranceismadeorrenewed.
EQCoverislimitedto$100,000foreach dwelling(orreplacementvalueiflower).
EQCover
{ Ifthefirepolicycoversaresidentialbuildingforareplacementsuminsured,thesizeofthe dwellingcan'tbeusedtocalculateEQCover.
{ Ifthegrannyflatisnotself-contained,thenthecoverprovidedforitisincludedinthecapforthemainresidentialbuilding.
Example
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F r a c t i o n a l ow n e r s h i pRecentlyanewwayofpurchasingresidentialproperty,by“fractionalownership”,hasbecomeincreasinglypopular.
Withfractionalownershiptheresidentialpropertyisbrokenupintoasetnumberofsharesandeachofthesesharesissold.Theseresidentialpropertiesaregenerallylarger(morevaluable)dwellingsoncoastallandorinlandruralestates.
Unliketimeshareswhereeachpurchaserisgiventherighttoonlyusethepropertyforasetnumberofweeksperyearoratasettime,fractionalownershipmeanstheshareholdersthemselvesdecidehowthepropertyistobeused,includinghoworwheneachshareholdercanuseit.
Ifthepropertyisstillbeingusedasahomeorholidayhomebytheowners,thenEQCwillcontinuetocoverit.
Ifitisgoingtobeusedonlyforaholidayletorasabedandbreakfastforexample,thenEQCovergenerallydoesnotapply.
C o n t r a c t w o r k s p o l i c i e sIncaseswhereadwellingcannotbelivedin(suchasundergoingextensiverenovationsorconversiontoflats)itwillnolongerbea"residentialbuilding"undertheEarthquakeCommissionAct1993.Thebuildingneedstobefullyinsuredunderacontractworkspolicy.
Iftherenovations/alterationsdonotaffecttheself-containednatureofadwellinganditcanstillbelivedin,EQCoverwillapplyunderthecontractworkspolicy.
S h ow h ome sEQCdoesnotprovidecoverforbuildingslikeshowhomesthatarepurelyusedtoshowcaseaproductordesignastheyarenobody'shomeandthereisnopresentintentionthattheywillbelivedinassomebody'shome.
Ifthedwellinghoweveriscapableofbeinglivedin,isonthemarkettobesoldandtheintentionisthatonceithassolditwillbelivedin,EQCoverdoesapply.
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" P e r s o n a l P r o p e r t y ""Personalproperty"isdefinedas”...propertythatislocatedinorona residentialbuilding;andincludespropertythatisusuallysolocatedbutis temporarilyremovedfromthebuildingforanyreason...”EQCoverforpersonal
propertyislimitedto$20,000perpolicy.
P e r s o n a l p r o p e r t y a t m u l t i p l e s i t u a t i o n s b u t i n s u r e d u n d e r o n ep o l i c yInordertoinsurepersonalpropertyunderonepolicydocument,wherethereisintendedtobemorethanoneinsuredsituationorwheretheinsuredsituationscontainpersonalpropertybelongingtomorethanoneperson(whereitisintendedthatthepropertyshouldbeseparatelyinsured,e.g.inthecaseofresthomeresidents);thefollowingendorsementcanbeused:
“For the purposes of Section 20 of the EQC Act 1993, each situation (and/or identified resident) has a separate fire insurance contract in respect of each such situation or resident.”
Thisendorsementwillthenenableeachsituationorresidenttohavepersonalpropertyinsuredupto$20,000.
P e r s o n a l p r o p e r t y i n s t o r a g eEQCovercoversresidentialpersonalpropertyinstorage,eithertemporarilystorediftheintentionisfortheper-sonalpropertytoreturntoaresidentialbuildingatastoragefacilityuntiltheyarethensentontoanewresiden-tialbuilding,ortemporarilyremovedfromaresidentialbuildingandthenreturningtothatresidentialbuilding.EQCoverisstilllimitedto$20,000.
P e r s o n a l p r o p e r t y i n t r a n s i tIftheinsurer’scontentspolicyexcludescoverwhileintransit,thereisstillEQCoverwhilethepersonalpropertyisintransitsolongasthecontentspolicyremainsinforce.Ifacontentsintransitpolicyistakenoutandincludescoverforfire,thenEQCoverapplies.
P e r s o n a l p r o p e r t y ( i n c l u d i n g l a n d l o r d ’s p e r s o n a l p r o p e r t y ) a s a s umi n s u r e d o r a s a p o l i c y e x t e n s i o nIfpersonalpropertyislistedonthepolicyaspartofthescheduleofpropertyinsured,EQCovershouldbeincludedforupto$20,000,oranylessersumspecifiedforthepersonalproperty.
Ifthecoverforpersonalpropertyisincludedasapolicyextension,EQCoverDOESapply.
IfcoverforpersonalpropertyisincludedinthedwellingsuminsuredEQCoverappliesandanextrachargeshould
bemade.
P e r s o n a l p r o p e r t y - i n t e r n a t i o n a l s t u d e n t s ' p e r s o n a l p r o p e r t y c o v e rTherearevariousschemesavailableforcoveringthecontentsofinternationalstudentswhentheyarestudyinginNewZealand.Unliketravelpoliciesthatcovercontentswhileonholiday,thiscoverisgenerallyfortheperiodthattheyareresidingandstudyinginNewZealand-generallyayearormore.
AscoverisforcontentsthatareinNewZealand,forstudentsthatarelivinginNewZealand,EQCoverappliesuptothemaximumEQCcapof$20,000perstudentand/orpolicy,providedthepolicyinsuresagainstfire.
However,studentsmustbelivinginaresidentialbuilding,asdefinedbytheEQCAct,forthecontentscovertoapply.Ifthecontentswillnotusuallybelocatedinaresidentialbuilding(asdefined),theywillnotbepersonalproperty(asdefined)andEQCoverwillnotapply.Thesestudentswillusuallybelivinginhostels,whicharenotresidentialbuildingsasdefinedbytheEQCAct.
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M i x e d U s a g e P r o p e r t i e sNote:TheexamplesbelowshowthemaximumcoveravailableundertheEarthquakeCommissionAct.Aresidentialbuildingisdeemedtocompriseonedwellingunlessthe existenceofahighernumberofdwellingsisdisclosedtotheinsureratthetimethe contractoffireinsuranceismadeorrenewed.
E x a m p l e 1Fiveself-containedapartmentsandoneretailshopinabuildingwithasingleownerandareplacementvalueof$1,000,000.
EQCoverislimitedto$500,000forthebuildingbecausetherearefivedwell-ingsinthebuilding:5x$100,000=$500,000,providedtheexistenceofahighernumberofdwellingsisdisclosedtotheinsureratthetimethecontractoffireinsuranceismadeorenteredinto.
Asmorethan50percentofthebuildingcomprises"dwellings",EQCwouldcoverdamageanywhereinthebuilding.
E x a m p l e 2 Threeflatsandaretailshopinabuildingwithasingleownerandareplacementvalueof$250,000.
EQCoveris$250,000.
As50percentofthebuildingcomprises"dwellings",EQCwouldcoverdamageanywhereinthebuilding.
E x a m p l e 3 Oneapartment,officesandretailshopsinabuildingwithoneownerandareplacementvalueof$1,000,000.
Thedefinitionof"residentialbuilding"includesa"partofabuilding"that comprises1ormore"dwellings"iftheareaofthedwellingsis50%ormoreofthetotalareaofthatpartofthebuilding.Thetopfloorisa"partofabuilding"thatmeetsthisdefinition.Accordingly,thatpartcountsasa"residential building".
EQCoverislimitedto$100,000perapartment.1x$100,000=EQCoverof$100,000fortheresidentialpartofthebuilding.
OnlydamagetothetopflooriscoveredbyEQC.Thisbuildingasawholeisnotaninsured"residentialbuilding",aslessthan50percentofthewholebuildingcomprises"dwellings".
apartment
apartment
apartment
apartment
apartment
retail shop
retail shop
res res res
apartment
offices
offices
offices
offices
retail shops
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B o d y c o r p o r a t e b u i l d i n g s / a p a r t m e n t c o m p l e x e sEQCover calculation scenarios for a complex of 12 apartments in a body corporate building
{ Replacementvalueofbuilding=$2m. EQCover=$1.2m(i.e.12x$100,000).
{ Replacementvalueofbuilding=$1m. EQCoverlimitedto$1m.
{ Insuredforindemnityonly.EQCoveris$100,000per apartment,i.e.$1.2m.
{ {
R e s t H o m e s
Theresthomeshownaboveisasinglebuilding,containingdormitorytypeaccommodation,andfull accompanyingfacilities.Thebuildingalsoincludesself-containedaccommodationfortheowner/manager.
EQCoverwouldbe$100,000fortheresthomepartand$100,000fortheowner’s/manager’saccommodation.
Contentsoftheresthomeandcontentsofthemanager’saccommodationcanbecoveredforupto$20,000+GSTeach,providedtheymeetthedefinitionof"personalproperty".
Iftheresidents’effectsarecoveredbytheresthomepolicy,eachresidentisabletoobtainupto$20,000+GSTofcoverprovidedthepolicystatesthatitistotakeeffectasaseparatecontractofinsuranceinrespectofeachresidentorsituation.
ResthomesarecoveredbyEQCduetospecificinclusionintheEarthquakeCommissionAct:
“Residentialbuildings"means-
(b)...anybuildingorpartofabuilding(whetherornotfixedtoland,ortoanotherbuilding,part,or structure)inNewZealandwhichprovideslong-termaccommodationfortheelderly...”
*Pleaserefertopage14forafullexplanationofEQCoveronpersonalproperty.
apartment 1
apartment 2
apartment 3
apartment 4
apartment 5
apartment 6
apartment 7
apartment 8
apartment 9
apartment 10
apartment 11
apartment 12
manager’s accommodation
rest home
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R e t i r e m e n t V i l l a g e s & R e s t H o m e C o m p l e x e s
C a l c u l a t i o n s f o r r e t i r em e n t v i l l a g e s & r e s t h ome c omp l e x e s
Example EQCover Total EQCover
*Villa-styleaccommodation (eachvillacontainingonedwelling)
Upto$100,000. $500,000.
Villapersonalproperty Upto$20,000. $100,000.
Garages Includedincoverforvillas. -
Resthomeaccommodation/administration,diningetc
Equatestooneself-containeddwelling. $100,000.
*Resthomecontents-in-cludesplant/equipment/stock
Upto$20,000. $20,000+GST
*Resthomeresidents'effects Upto$20,000. $20,000xnumberof residentsorsituations.
Hospital Ifprovidingahigherlevelofresthomecare(andthereforelong-termaccommodationfortheelderly).
Ifhospitalisprovidingcarewherepatientsareadmittedforaparticularreason,treatedandthenreleasedbacktotheresthome
Includedincoverforresthome.
Includedincoverforresthome,provideditisusedforthepurposesofthe residents and is appurtenant tothemainbuilding.
Garagesforvillas
Villa-styleaccommodation
Resthomeadministration,dining,laundry,livingareas
Hospice
Resthomeaccommodation,notself-contained
Chapel
Hospital
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H o l i d a y A c c o m m o d a t i o n
Mo t e l s
EQCoverislimitedto$100,000+GSTforthemanager’saccommodationonly.
B e d a n d B r e a k f a s t A c c ommod a t i o n ( B & B ’s )EQCoverdoesapplytoaB&Bwheretheownerstilllivesinthehousebutrentsoutacoupleofbedroomsandwheretheowner’susablespaceismorethan50%ofthebuilding.Evenifboththeownerandguestsusethesameareas,EQCoverwouldapplyaslongasthespaceusedbytheownerismorethan50%.
Example 1
A200m2B&Bwithfourbedrooms-threebedroomswithatotalfloorareaof60m2areavailableforguests.Thisis75%ofbedroomsbutonly30%offloorarea.
EQCoverappliesastheowners’useablespaceismorethan50%oftheproperty.
Example 2
Atwo-levelB&Bwithdownstairsavailableforguests,containingtwobedrooms,loungeetc,withatotalfloorareaof100m2.Theupstairs,forfamilyuseonly,hastwobedrooms,lounge,kitchenetc,andatotalfloorarea(90m2)only.
EQCoverappliestotheupstairsarea(90m2)only.
Example 3
Propertyhastwobuildingsonit,oneforguestsandoneforowners.Onlytheowners'buildingiscoveredeveniftheguestshavetousethebathroomand/orkitchenintheowners'residence.
motel accommodation
manager’s accommodation
motel accommodation
Chapel Classifiedasanappurtenantbuildingorstruc-ture(ifforthesoleuseoftheresidents)toresthomecomplex.
Includedincoverforresthome/villagecomplex.
Hospice Doesnotprovidelong-termaccommodationfortheelderly.
Notcoveredinitsownright,butmightbeanappurtenantbuildingifusedforthe purposesoftheresidents.
* Inordertoinsurecontentsinmorethanonesituationunderthesamepolicyorresidents’effects,the followingendorsementcanbeused,
“For the purposes of Section 20 of the EQC Act 1993, each situation (and/or identified resident) has a separate fire insurance contract in respect of each such situation or resident.”
Thisendorsementwillthenenableeachsituationorresidenttohavecontentsinsuredupto$20,000
Forexcessesfordamagetobuildingscontainingmultipleresidentialunits,seeExcessesonpage8.
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H o l i d a y H ome sEQCcanprovidecoverforholidayhomesthatarerentedoutiftheintentionoftheownersistouseitwhenevertheywishandtheystoretheirownpossessionsthere,nomatterhowminimaltheuseis,providedthecontractoffireinsuranceremainsinforce.
When EQCover on holiday homes DOES NOT apply:
{ Iftheholidayhomeissetuppurelyasacommercialenterpriseandtheownersdonotuseitorintendtouseitfortheirownpurposes,thenEQCoverDOES NOT apply.
{ Ifanorganisationownsholidayhomespurelyforthebenefitoftheirmembers,andthesememberspaytostayintheholidayhomes,EQCoverDOES NOTapply.
S e r v i c e d A p a r tm e n t s a n d T i m e - S h a r e sServicedapartmentsandtime-sharesarenotcoveredbyEQCunless:
{ Thereisaself-containedmanager’sflat,inwhichcasethatflatiscovered;or { Iftheowner/manager’spartoftheaccommodationisgreaterthan50%ofthetotalareaofthebuilding.
Inaboardinghousewhichhasamanagerwhousesoneofthebedrooms(notself-contained),thereisnoEQCover.
Inabuildingthathasbothservicedandowner-occupierapartments,EQCoverappliestotheowner-occupierapartmentsbutnottotheservicedapartments.
The 30-day rule (serviced apartments and time-shares)
Itwouldappearthatinsomelocalities,oncesummerisover,servicedapartmentsandtime-sharesreverttolongtermpermanentrentals.Iftheapartmentisrentedlongterm(formorethan30daysconsecutively)thenitisapermanenthomeforthatperiodandEQC’scovercanapply.
TodeterminewhetherEQCoverisapplicable,the50%ruleapplies.Thatis,ifoverayear,themajorityofthetimethebuildingisusedasatime-shareorservicedapartmentthenEQCoverDOESNOTapply.Ifthemajorityofthetimeitisusedaslong-termaccommodation,thenEQCoverDOESapply.
C a r a v a n sTherearetwodistincttypesofcaravantypeaccommodation.
E x amp l e 1 Thecaravanisabletobetowedtoacampsiteandisthentowedawayoncetheholidayisover.EQCover does not apply.
E x amp l e 2Caravansthataretowedordeliveredtoasiteandare:
{ Self-contained(seePage4fordefinition) { Connectedtolocalservicesorhavetheirownabilitytobeselfsufficient { Cannotbemoved(wheelsremoved,fixedtopilestructure),EQCover does apply.
Ifthesecaravansareinsuredfor“marketvalue”orindemnityvalue,EQCoverisautomatically$100,000oritslowerreplacementvalue.
Ifcaravanisinsuredforreplacement,EQCoverislimitedbythecapof$100,000.Ifthereplacementsuminsuredisforexample$30,000,EQCoverwouldalsobe$30,000.
Seepage11foracompleteexampleoncalculatingEQCoveronresidentialbuildings.
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SometimesanintermediaryinNewZealandoroffshorearrangesoffshorecoverforresidentialpropertylocatedinNewZealand.
EQCoverstillappliesinthissituationandremittanceoftheEQCpremiumismade directtoEQC,generallywithin60daysoftheinception/expirydateofthecover (unlessotherarrangementshavebeenmade).
Therearesituationswhereclientsdon’twantfireinsurancecoverontheirresidentialpropertyorareunabletopurchaseinsuranceviaaninsurancecompany,butstillwishtohavethecoverprovidedbyEQC.
InsituationslikethisEQCcorrespondseitherdirectlywiththeclientorthroughanintermediary.
IfEQCagreestoprovidecover,thetermsandconditionsareusuallythesameasfortheEQCoverprovidedwhenyouenterintoafirecontractthroughaninsurancecompany.AnyexclusionsorpropertytitlenotationssuchasSection74oftheBuildingAct,stillapply.
TheGovernmenthasstatedanintentiontoreviewtheEQCschemeinthenearfuture.EQCwillnotprovidedirectcovertonewclientsinadvanceofthatreview.
IfyouhaveanyenquiresorwouldlikefurtherinformationabouteitheroffshoreplacementsorcoverdirectwithEQC,pleasecontact: Lee Patton ComplianceManager Phone:049016665 Email:[email protected]
OffshorePlacements
EQCover Direct withEQC
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1. Anypropertythatisnottangibleproperty.
2. Anymotorvehicle(beingavehicledrawnorpropelledbymechanicalpower),oranypartsof,or accessoriesto,amotorvehicle.
3. Anytrailer(beingavehiclewithoutmotivepowerthatiscapableofbeingdrawnorpropelledbya motorvehicleandthatisnotbeingusedasadwelling),oranypartsof,oraccessoriesto,atrailer.
4. Anyvessel(beinganythingmadetofloat,whetheritisfixedorfree,andwhetherornotithasany meansofpropulsion),oranypartsof,oraccessoriesto,avessel.
5. Anyaircraft,oranythinginoronanaircraft.
6. Anybush,forest,tree,plant,orlawn.
7. Anygrowingcrops(includingfruittreesandvines)orcutcropsintheopenfields.
8. Anyexplosives.
9. Anyanimals,includinglivestockandpets.
10. Anyroad,street,drive,path,bridge,orculvertotherthanagangway,ladder,accessplatform,orother formofaccess,constructedinaresidentialbuildingorbeinganintegralpartofaresidentialbuilding.
11. Anydrain,channel,tunnel,orcutting,unlessusedtoconnectpartsofoneormoreresidential buildings.
12. Anydam,breakwater,mole,groyne,fence,pole,orwallthatdoesnotconstituteanintegralpartofa residentialbuilding.
13. Anyreservoir,swimmingpool,bath,spapool,tank,orwatertowerotherthan-
a) Areservoir,swimmingpool,bath,spapool,tankorwatertowerthatconstitutesanintegral partof,andthatiswithin,aresidentialbuilding;or
b) Areservoirortankusedinaresidentialbuildingasastoragevesselforanyliquidproduct;or
c) Awatertankformingpartofthewatersupplytoaresidentialbuilding;or
d) Aseptictank.
14. Anytenniscourt,whetherinsideoroutsideandwhetherlawnornot.
15. Anyjetty,wharf,orlanding.
16. Anypavingorotherartificialsurface.
17. Anyjewellery,preciousstones,money,worksofart,securities,documents,orstamps.
EQCoverdoesnotcoveranyconsequentiallossIncludinglossbytheft,vandalism,lossofprofits,orbusinessinterruption.NordoesEQCoverincludethecostsofstayingsomewhereelsetemporarilyafteranearthquakeornaturaldisaster.
PropertynotinsuredbytheEQCAct
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ThefollowingnoticeispostedonEQC’swebsite.
C o n d i t i o n a l B u i l d i n g C o n s e n t I s s u e sDo you have a building consent issued subject to Section 74 of the Building Act 2004 or Section 36(2) of the Building Act 1991?
Ifyoudo,therewillbeanentryonyourcertificateoftitlewhichindicatesthatthelandwithinthatcertificateoftitleislikelytobesubjecttospecifiednaturalhazard/s.
Yourlocalcouncilwillhaverequiredthisentrytobeplacedonthecertificateoftitleasaconditionofconsentforbuildingworkonyourproperty.Ifyouhaveanyqueriesabouttheconditionalconsentandtheentryonyourtitle,youwillneedtotalktothecouncilinquestion.EQCdoesnothaveanyauthorityinrelationtothatentryortheconsentconditions.
Implications for EQCover
TheEarthquakeCommissionAct1993(Schedule3,clause3(d))givesEQCadiscretiontodecline,ormeetpartonlyof,aclaimwherethecertificateoftitlefortheaffectedpropertycontainssuchanentry.WhetherEQCwillactuallydeclinepartorallofaclaimonthisgrounddependsinpartonthenatureofthehazardandthenaturaldisasterthatmayoccur.
IfyouhaveanyqueriesaboutyourcoverundertheEarthquakeCommissionAct,pleasecallourfreephonenumber(forbothland-lineandmobilephones)on0800652333.ItwillhelpustoansweryourqueryifyoufindoutfromtheCouncilthenatureofthehazardspecifiedonyourtitlebeforeyoucallEQC.
InsomeinstancesprivateinsurersprovidecoverfornaturaldisasterdamagebeyondEQCover.AnentryonyourcertificateoftitlesubjecttoSection74oftheBuildingAct2004orSection36(2)oftheBuildingAct1991mayalsoaffectthattop-upinsurance.Wesuggestthatyoucontactyourprivateinsurertofindoutwhetherthisentrywillaffectyourinsurancewiththem.
B u i l d i n g A c t 2 0 0 472. Building consent for building on land subject to natural hazards must be granted in certain cases-
Despitesection71,abuildingconsentauthoritythatisaterritorialauthoritymustgrantabuilding consentifthebuildingconsentauthorityconsidersthat-
(a) thebuildingworktowhichanapplicationforabuildingconsentrelateswillnotaccelerate, worsen,orresultinanaturalhazardonthelandonwhichthebuildingworkistobecarried outoranyotherproperty;and
(b) thelandissubjectorislikelytobesubjectto1ormorenaturalhazards;and
(c) itisreasonabletograntawaiverormodificationofthebuildingcodeinrespectofthenatural hazardconcerned.
Section74oftheBuildingAct2004
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73. Conditions on building consents granted under section 72 -
(1) Abuildingconsentauthoritythatisaterritorialauthoritythatgrantsabuildingconsentunder section72mustinclude,asaconditionoftheconsent,thatthebuildingconsentauthority will,onissuingtheconsent,notifytheconsentto,-
(a) inthecaseofanapplicationmadeby,oronbehalfof,theCrown,theappropriate MinisterandtheSurveyor-General;and
(b) inthecaseofanapplicationmadeby,oronbehalfof,theownersofMaoriland,the RegistraroftheMaoriLandCourt;and (c) inanyothercase,theRegistrar-GeneralofLand.
(2) Thenotificationundersubsection(1)(a)or(b)mustbeaccompaniedbyacopyofany projectinformationmemorandumthathasbeenissuedandthatrelatestothebuilding consentinquestion.
(3) Thenotificationundersubsection(1)(c)mustidentifythenaturalhazardconcerned.
74. Steps after notification-
(1) Onreceivinganotificationundersection73,-
(a) theSurveyor-GeneralortheRegistraroftheMaoriLandCourt,asthecasemaybe, mustenterinhisorherrecordstheparticularsofthenotificationtogetherwitha copyofanyprojectinformationmemorandumthataccompaniedthenotification: (b) theRegistrar-GeneralofLandmustrecord,asanentryonthecertificateoftitleto thelandonwhichthebuildingworkiscarriedout,- (i) thatabuildingconsenthasbeengrantedundersection72;and
(ii) particularsthatidentifythenaturalhazardconcerned.
(2) Ifanentryhasbeenrecordedonaduplicateofthecertificateoftitlereferredtoinsubsection(1)(b) undersection641AoftheLocalGovernmentAct1974orsection36oftheformerAct,theRegistrar- GeneralofLanddoesnotneedtorecordanotherentryontheduplicate.
(3) Subsection(4)appliesifabuildingconsentauthoritydeterminesthatanyofthefollowingentriesisno longerrequired:
(a) anentryreferredtoinsubsection(1)(b):
(b) anentryundersection641AoftheLocalGovernmentAct1974:
(c) anentryundersection36oftheformerAct.
(4) ThebuildingconsentauthoritymustnotifytheSurveyor-General,theRegistraroftheMaoriLand Court,ortheRegistrar-GeneralofLand,asthecasemaybe,whomustamendhisorherrecordsor removetheentryfromthecertificateoftitle.
E Q C A c t 1 9 9 3 - S c h e d u l e 3 , c l a u s e 3 ( d )Circumstances where Commission may decline claim-
TheCommissionmaydecline(ormeetpartonlyof)aclaimmadeunderanyinsuranceofanypropertyunderthisActwherethecertificateoftitleforthelandcomprisingtheproperty,oronwhichthepropertyissituatedcontainsanentryundersection36(2)oftheBuildingAct1991oranentryundersection74oftheBuildingAct2004.