October 9th earthquake – insurance update

What does this new event mean for new insurance cover?

Sunday 9th October saw another significant aftershock, an earthquake of magnitude 5.5, hit Christchurch. As you may be aware, the October 9th event was the most significant earthquake since the 13 June. Fortunately this event did not cause anywhere near the level of damage the 13 June event did, although there are reports of damage.

So what does this new event mean for new insurance cover and does this mean another 28 day stand down period?

On the advice of the Insurance Council, it is worth contacting individual insurers directly regarding their intentions. However, indications from the councils members were that the October 9th event had not caused widespread damage. As a result, the situation for insurers had not really changed. The majority of insurers are declining new cover that will expose them to increased risk but they are prepared to work with existing customers on a case by case basis. For example; where an existing customer of an insurer buys a new property in another zone, most insurers are very keen to write new cover as soon as possible. The situation is being continuously reviewed by the insurance companies.

The Council said that the October 9th event may affect rebuilds to the extent that it would slow the rebuild process initially as rebuilds are more vulnerable to events of this magnitude.

The EQC also announced on Monday that the earthquake will be treated as a new event for insurance purposes.

Posted in: Insurance