Support for all New Zealanders in the event of a natural disaster The Earthquake Commission – Toka Tū Ake (or EQC) is insurance set up by the Government to support New Zealanders in the event of certain natural disasters.

This insurance covers damage to residential homes and certain residential land arising from earthquakes, landslips, volcanic eruption, tsunami, and hydrothermal activity. The land cover applies to land within 8m of the home and is only extended to 60m for land under or supporting the main access way to the house (excluding driveway surfacing).

FMG collects the levy on behalf of EQC through your premium and manages your claims following earthquakes or any other EQC covered natural disasters.

From 1 October 2022 the Government is doubling the maximum amount the EQC will pay out for claims (the EQCover) to $300,000+GST, if your house is damaged in certain natural disasters.

That means EQC will pay up to the first $300,000+GST of your building claim and FMG will cover the rest up to your sum insured. There is no cover for land under your FMG policy however, the EQC cap only applies to buildings and not land (land is capped at the land value).

The EQC levy is also increasing from 1 October 2022 to fund the increase to the EQC cap from a maximum of $300 ($345 incl. GST) up to a maximum of $480 ($552 incl. GST).

All new insurance and renewals from 1 October 2022 will be impacted by these changes. All general insurers in New Zealand who offer house or rental and employee house policies will be implementing the Government’s new mandatory EQC levy on new and renewing policies.

The change in the EQC levy is just one part of your overall premium. There are lots of things that can impact your premium, such as changes to your policy or updating your sum insureds. Also, higher claim costs due to inflation related price increases, like the cost of building materials and labour.

Having very high levels of insurance cover is essential for those affected by a major disaster, but also for the health of the whole economy. The Canterbury Earthquakes resulted in around $40 billion in losses at an industry level, in an area not identified as being at high risk. Around 80% of those losses were insured.

Overseas, several countries with high natural hazard risk do not have an EQC type scheme and have relatively low levels of disaster insurance uptake. This places individuals, national and local governments and their economies at high risk from natural disasters.

FMG is required to have enough capital or reinsurance in place to meet a one in a thousand-year earthquake, so you can be confident we will be there to help in the event of a natural disaster.

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