Last week’s Government budget announcement included measures to top up the National Disaster Fund, which pays out claims related to earthquake damage.
This will mean that homeowners’ insurance premiums are set to rise by up to $69 a year.
At present, insured homeowners pay a premium rate of 15c per $100 of insurance cover, to a maximum of $207 a year (based on the maximum cover of $100,000 for buildings and $20,000 for contents).
In November, that will rise to 20c per $100 of cover, to a maximum of $276 a year.
The National Disaster Fund has paid out $9.5 billion so far in claims to people affected by the Canterbury earthquakes. Another $550m is expected to be paid out for claims related to the Kaikoura Earthquake.
That had exhausted the fund’s reserves, Finance Minister Joyce said.
“The Earthquake Commission has a Government guarantee and $4.7 billion in re-insurance cover, so homeowners will be covered if there is another natural disaster.
“But we need to start the process of replenishing the fund so it is available to contribute to future natural disasters.”
Under the higher levy, the fund would be restored to this level within 10 years.