What happens when you make a home insurance claim after you've been impacted by a natural hazard? After the Kaikoura earthquake in 2016, the Insurance Council of NZ – Te Kāhui Inihua o Aotearoa (ICNZ) and several New Zealand insurers worked together to create a new model for managing natural hazard claims. The National Disaster Response Model (NDRM) is a partnership between the Natural Hazards Commission Toka Tū Ake (NHC) and a number of private insurers in New Zealand, created to simplify and speed up the claims process. We’ve outlined each step of a claim that includes Natural Hazards Cover (NHCover) so you know what to expect if you need to make a claim following damage caused by a natural hazard.
Home insurance is designed to cover your property, giving you peace of mind should the unexpected happen. If your home is damaged by a natural hazard, a portion of your claim will be covered by the NHC. NHCover covers damage to your home caused by an earthquake, landslide, volcanic activity, tsunami, and hydrothermal activity as well as fire resulting from any of these.
NHCover also provides cover for damage to your land caused by natural hazards (earthquake, natural landslide, volcanic activity, tsunami, and hydrothermal activity) and for land damage from storms and floods.
If your home is damaged during a storm or flood, this will be covered by your private home insurance, subject to the term of the policy. You can find out more about how your storm or flood damage claim might be managed on our blog.
How do I get covered by NHCover?
If you have private home insurance, you’ll automatically pay the Natural Hazards Insurance levy as part of your insurance premium and, therefore, gain NHCover.
If, like AA Insurance, your insurance provider is part of the partnership with the NHC, your claim will be managed by your insurer on behalf of the NHC. They will assess, manage and settle your entire claim – including the NHCover portion of it – on behalf of the NHC and be your point of contact during the entire claims process.
What to do after an event
Assess the situation: stay calm and make sure you and everyone else at the scene are out of danger. Only return home if it’s safe to do so. Take care of your safety first, then, if you can do it safely, check to see what damage has occurred.
In case of emergency: if you need emergency accommodation, please call us on 0800 500 216. If you need to make a claim, the fastest way you can do that is claim online at aainsurance.co.nz/claims.
The claims journey with AA Insurance
Home insurance claims can be complex, particularly after a natural hazard event. Due to the nature of NHCover claims, they can take longer to complete than other types of claims. The claims journey detailed below is an indication of how your home claim may be handled if you are a customer with us, but please bear in mind that each claim is unique.
Once you lodge your claim, you’ll be given a claim number. If you made your claim online, we’ll get in touch with you and take you through the next steps in the claims process. If you made your claim over the phone, you’ll be taken through the next steps on the call. A Customer Manager will be appointed to your claim and keep you informed throughout the process.
If your home is determined as being uninhabitable as a result of an event covered by your policy, we’ll cover the reasonable costs of temporary accommodation for you, your family and even your domestic pets, subject to the limits of your policy. Find out more in the ‘Standard benefits – cover automatically included’ section of your policy document.
Provided it’s safe to access your home, your Customer Manager may arrange for an assessor to visit your property and complete an initial assessment of the damage. Once this is done, they’ll provide us with an assessment report which will outline the damage and may help to arrange other experts as required.
If your property has suffered land damage, we may arrange a visit from a geotechnical engineer if the damage falls within the NHCover limits. Once this is done, they’ll provide us with a report which will be used for the purpose of settling your claim. A registered valuer may also be appointed to determine the value of the land damaged by the natural hazard.
Once we have completed all assessments and reviewed any relevant reports and determined your NHCover claim settlement entitlement, we’ll be in touch to discuss the outcome. It’s important to note that any cover for land will be provided by the NHC; your insurance provider will be acting on their behalf.
How will my claim be settled?
NHCover claims are generally cash settled. NHCover provides a maximum cover for residential buildings of $345,000 (incl GST), which increased from $172,500 as of 1 October 2022. The NHC will pay up to this amount towards the cost of repairing or rebuilding your home. If the repair or rebuild costs exceed the NHC Building Cap, your Home or Landlord Insurance Policy will then top this amount up, to a maximum of your sum insured depending on the result of the assessments. Your sum insured is the maximum amount that we will pay to rebuild your home after a natural hazard.
That’s why it’s very important that you regularly review and update your sum insured so that, when it comes to claim time, we can help put you in the same position you were in prior to the event. There are several ways you can calculate your sum insured, including contacting an expert such as a builder, architect or quantity surveyor. Alternatively, you can use the online Cordell Sum Sure Calculator which estimates typical building costs for standard residential houses.
NHCover also provides cover for your land within certain limits and conditions. It's important to note that not all land is covered - find out more about the residential land that is covered on the NHC’s website.
What excesses apply in an NHCover claim?
An excess is the amount you pay when you make a claim on your insurance policy.
The NHC excess for NHCover claims is a percentage based on the settlement or payment amount you receive for your NHCover claim:
Dwelling claim – 1% of the payment up to cap, with a minimum of $200 and a maximum excess of $3,450 (incl GST).
Land claim – 10% of the land settlement amount with a minimum of $500 and a maximum of $5,000.
If your property has been damaged on or after July 1st 2024, you’ll have different excesses applied to your claim:
Dwelling claim – flat rate excess of $500.00 per dwelling (incl. GST)
Land claim – flat rate excess of $500.00 per dwelling (incl. GST)
If you're also claiming under your AAI Home or Landlord Insurance Policy, in certain circumstances, you may also be required to pay a natural hazard excess. This excess applies to items or property that have been damaged as a result of a natural hazard event but are not covered by the NHC. For example, driveways, fences and swimming pools are not covered by the NHC but are covered under your Home Insurance policy. You can find out more about the natural hazard excess on our website.
When should I make a claim?
The sooner you get in touch, the sooner your insurer can help. Your insurance provider may need your policy number or personal details to locate your relevant policy. If you’re insured with us, start your claim online or give us a call on 0800 500 216 when you’re ready.
I’ve made a claim. What’s next?
In a large-scale event, all claims where immediate help is required, such as emergency accommodation, are prioritised. When you lodge your claim, we’ll ask you for any additional information we may need to progress your claim and take you through the next steps.
In some large-scale events, claims for certain types of damage or replacements for certain items could take longer than expected.
Want to learn more?
If you’re looking for further information about our claims process or would like to find out more on simplifying insurance, check out our other blogs.
Any questions?
Now’s a great time to review your insurance. We recommend checking your details are up to date and ensuring the policy and cover you’ve chosen is right for you and your insurance needs.
If you have any questions about your insurance, need to update your AA Insurance policies or would like a quote, don’t hesitate to contact us. We’re open from 8am to 8pm weekdays and from 8am to 6pm weekends and public holidays.
This blog provides general information only and is not intended to be a recommendation or personalised financial advice. Excesses, terms, conditions, limits and exclusions apply to AA Insurance Limited’s policies. Please check the policy wording for details of cover. The provision of cover is subject to the underwriting criteria that apply at the time.