The Natural Hazards Insurance Act 2023 replaces the Earthquake Commission Act 1993 framework. It continues the Earthquake Commission under the name Toka Tū Ake - Natural Hazards Commission.
Main laws
New Zealand Act
Natural Hazards Insurance Act 2023
It is most relevant to small businesses that operate from home, own residential rentals, or have mixed-use property.
In forceNew ZealandPlain-English guide8 practical checks
Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.
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Quick read
- The Natural Hazards Insurance Act 2023 matters to small businesses mainly where residential property is involved.
- That includes a home office, a residential rental, or a mixed-use building with a flat or apartment.
Likely relevant if
- Home-based businesses operating from a residential property
- Landlords with residential rental property
- Owners of mixed-use buildings with a residential component
Check first
- Natural hazard cover under the Act is linked to a fire insurance contract.
- An insured person must pay the levy amount to the fire insurer where levy is payable.
- The levy amount must be stated separately and brokerage must not be charged on it.
What this Act does
The Act provides first loss insurance for residential buildings and residential land against direct natural hazard damage. It also deals with claims, settlement, complaints, disputes, the Natural Hazard Fund, and the levy.
Practical sense check
- Treat this as a residential cover regime, not a full business insurance regime
- Check whether your property is residential, mixed-use, or fully commercial
- Check whether there is a fire insurance contract in place
- If you rely on a home office or rental income, compare the Act with your private policy
Who is most affected
The Act is most relevant to small businesses that own or use residential property. That includes people running a business from home, landlords with residential rentals, and owners of mixed-use buildings.
Property outside New Zealand is not covered. The Act also uses detailed definitions for dwelling, eligible building, mixed-use building, residential building, residential land, appurtenant structures, service infrastructure, common property, and joint property.
What is covered
The Act separates cover into building cover and land cover. Building cover insures a residential building on a replacement cost basis. Land cover insures residential land on an indemnity basis.
Key points
- Residential building damage from earthquake
- Residential building damage from hydrothermal activity
- Residential building damage from landslide
- Residential building damage from tsunami
- Residential building damage from volcanic activity
- Fire caused by those hazards
- Residential land damage from those hazards
- Residential land damage from storm or flood
- Fire caused by storm or flood
The Act also has specific rules for retaining walls, bridges, culverts, common property, joint property, shared property, and imminent damage.
Common exclusions and gaps
Schedule 2 lists excluded property. This is important because owners often assume more is covered than the Act actually provides.
Key points
- Fences
- Mailboxes
- Clothes lines
- Structures used to house animals
- Outdoor cooking facilities
- Paths, driveways, stairs, walkways, paving and other artificial surfaces in some circumstances
- Some retaining walls, bridges and culverts
- Most swimming pools, spas and baths outside an eligible building
- Sports fields and courts
- Living things such as plants and fungi
- Drainage ditches and open drains
- Jetties, wharves and landings
- Dams, reservoirs, breakwaters, moles and groynes
Practical sense check
- Do not assume outdoor structures are covered
- Check whether an item is part of an eligible building or appurtenant structure
- Review your private insurance for excluded items that still matter to your property use or rental income
When business owners should pay attention
This Act often becomes relevant during ordinary property and insurance decisions. Common trigger points include buying a residential rental, renewing fire insurance, altering a mixed-use building, or discovering damage after a storm, flood, earthquake, or landslide.
It can also matter where a property has shared accessways, retaining walls, service infrastructure, or common property. Prior damage and title notifications can also affect how the Act applies.
Claims and claim risks
An insured person may make a claim. The Act says a claim covers all damage that occurs during the damage period and may include later damage. The Act also sets a time limit for making claims.
The Commission must assess, decide, and settle claims. It can also request further information. The Act allows claims to be declined in specific situations, including prejudicial delay, no financial loss, non-compliance with a condition, misleading information, fraud, failure to protect property, intentional acts or omissions, unlawful conduct, substandard construction, and some natural hazard notifications on title.
Risk controls
- Lodge the claim promptly after discovering damage
- Include all damage from the relevant damage period
- Keep photos, videos, invoices, reports and quotes
- Respond carefully to requests for further information
- Take reasonable steps to protect the property from further damage
- Avoid guessing or overstating facts
Complaints and disputes
The Act requires a Code of Insured Persons' Rights. It also requires the Commission to have a complaint management procedure and a review procedure for complaint decisions about alleged breaches of the Code.
The Commission must also participate in a dispute resolution scheme. That means some disagreements may be dealt with through complaint, review, or dispute processes rather than going straight to court.
Levy and insurer obligations
The Act funds natural hazard cover partly through a levy. The insured person must pay the levy amount to the fire insurer. The levy amount must be stated separately, and brokerage must not be charged on it.
Fire insurers have detailed statutory duties. They must keep records of fire insurance contracts, including insured person details, identifying details for buildings and dwellings, renewal dates, information needed to calculate building caps, levy payment details, and some excluded property details.
Those records must generally be kept for 7 years after the contract expires, or 25 years if a claim has been made. The Act also provides for auditing and reporting requirements through regulations.
Information-gathering and entry powers
The Commission can authorise people to require information by written notice if it reasonably needs that information to perform its functions. A recipient has witness-style privileges, including privilege against self-incrimination.
Authorised persons may also have powers to enter land, buildings, or places at reasonable times for information-gathering. Special protections apply to homes and marae. Entry to a home or marae generally requires consent or a warrant.
Practical sense check
- Check the person's identity and written authorisation
- Read any written notice carefully
- Note the response period
- Keep a record of what was provided
- Do not obstruct or provide misleading information
Practical examples
If you run a business from home and an earthquake damages the house, retaining wall, and driveway, the dwelling may fall within building cover. The driveway may not. You may need to separate each loss item and compare the Act with your private policy.
If you own a shop with an apartment above it, a landslide may engage the Act for the residential part but not the commercial part. Mixed-use and shared property rules may matter.
If you own a residential rental and delay a storm claim, the Act allows a claim to be declined if the delay is prejudicial. Early notice and good records can be important.
Common questions
Does this Act cover ordinary commercial premises?
Usually no. The Act is aimed at residential buildings and residential land, not general commercial property. It may still matter if your property has a residential component, such as a home office, rental house, or mixed-use building.
When does natural hazard cover apply?
The Act links natural hazard cover to a fire insurance contract. The detailed start and end rules sit in Part 2 of the Act.
What hazards are covered?
For residential buildings, the Act covers direct damage from earthquake, hydrothermal activity, landslide, tsunami, volcanic activity, and fire caused by those hazards. For residential land, it also covers direct damage from storm and flood, and fire caused by storm or flood.
Are driveways and fences covered?
Not necessarily. Schedule 2 lists excluded property, including items such as fences, paths, driveways, paving and other artificial surfaces in some circumstances. You need to check the Act and your private policy carefully.
Who has record-keeping duties under the Act?
The Act places detailed record-keeping, auditing and reporting duties on fire insurers. Ordinary property owners are more likely to be affected through claims, information requests, and the need to keep good evidence of damage.