1

EQCoverA n i n s u r e r ’ s g u i d e

S e p t e m b e r 2 0 1 2

The provisions of the Earthquake C o m m i s s i o n A c t 1 9 9 3 a n d Regulations will always prevail over the contents of this Insurer's Guide. You should always refer to the Act when determining issues involving the Act.

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EQC Contacts 3

EQCover 4

{ What is EQCover? 4

{ Housecover("residentialbuildings") 4

{ Contentscover("personalproperty") 5

{ "Residentialland"cover 6

{ EQCoverdiagram 7

{ Premium 8

{ Excesses 8

{ Section28oftheEarthquakeCommissionAct-CancellingEQCover 9

{ Section29oftheEarthquakeCommissionAct-GST 9

{ Section30oftheEarthquakeCommissionAct 9

MakingaclaimwithEQC 10

CalculatingEQCover 11

{ Dwellings(boardinghouses,fractionalownership, contractworkspolicies,showhomes) 11

{ PersonalProperty(inmultiplesituations,instorage,intransit, landlord'scontents,internationalstudents) 14

{ Mixedusageproperties 15

{ Bodycorporatebuildings 16

{ Resthomes 16

{ Retirementvillages&resthomecomplexes 17

{ Holidayaccommodation(motels,bedandbreakfasts,holidayhomes, servicedapartments,time-shares&caravans) 18

Offshoreplacements 20

EQCoverdirectwithEQC 20

PropertynotinsuredbytheEQCAct 21

Section74oftheBuildingAct2004 22

Contents

The provisions of the Earthquake Commission Act 1993 and Regulations will always prevail over the contents of this Insurer's Guide. You

should always refer to the Act when determining issues involving the Act.

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T r a i n i n g E n q u i r i e sShanneMorrissey LearningandDevelopmentManager(smorrissey@eqc.govt.nz)

Freephone 0800326243

P r e m i u m & E Q C o v e r E n q u i r i e sLeePatton ComplianceManager(lpatton@eqc.govt.nz)

DDI (04)9016665

Freephone 0800326243

BrianBurney InsuranceSpecialist(bburney@eqc.govt.nz)

DDI 037419428

Freephone 0800326243

E Q C C o r p o r a t e O f f i c eLevel20,MajesticCentre

100WillisStreet

POBox790

Wellington6140

Phone(04)9786400

Fax(04)9786431

Claims0800326243or0800DAMAGE

Claimsfax(04)9786432

Websitewww.eqc.govt.nz

Contacts

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W h a t i s E Q C o v e r ?EQCoverisEQC’snaturaldisasterinsurancescheme.Itinsureshomes,certainlandandsomepersonal belongingsagainstnaturaldisasterdamagecausedbythefollowing:

{ Earthquake { Landslip { Tsunami { Volcaniceruption { Hydrothermalactivity { Stormorflooddamage-TOLANDONLY { Firefollowinganyoftheabove

H o u s e C o v e r ( " r e s i d e n t i a l b u i l d i n g s " )EQCinsures"residentialbuildings",whichisatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993,whenthoseresidentialbuildingsareinsuredunderacontractoffireinsurance.A"residentialbuilding"isanybuilding,orpartofabuilding,orotherstructurewhichcomprisesorincludes1ormoredwellings,iftheareaofthedwellingordwellingsconstitutes50%ormoreofthetotalareaofthebuilding,partorstructure.

ResidentialbuildingsareinsuredunderEQCoverfortheirreplacementvalue,upto$100,000pereventforeach"dwelling"inthebuilding.Propertyownerscangettop-upcoverfromprivateinsurerstoinsureagainstnaturaldisasterdamagetothebuildingabovetheEQClimit.

Anybuildingorpartofabuildingprovidinglong-termaccommodationfortheelderlyisalsoa"residential building"iftheareaofthebuildingprovidinglong-termaccommodationfortheelderlycomprises50%ormoreofthetotalareaofthebuilding,partorstructure.

Certainservices(suchaswatersupplyservicesandgasservices)ownedbytheownerofthebuilding(ortheownerofthelandonwhichthebuildingissituated)arealsoincludedwithintheEQCcoverforthe"residentialbuilding",butonlywherethoseservicesarewithin60metresofthebuilding.

Outbuildingsandappurtenantstructures(suchasgaragesandgardensheds)whicharecoveredunderthehousepolicyarealsoincludedwithintheEQCcoverforthe"residentialbuilding",wheretheyareusedforthepurposesofthehousehold.

Whetherabuildingisa"residentialbuilding"asdefinedmustbedeterminedwheneveracontractoffireinsur-anceinrespectofthatbuildingismadeandeverytimethatthecontractoffireinsuranceisrenewed.Ifabuild-ingisa"residentialbuilding"whenthecontractoffireinsuranceismadeorrenewed,EQCoverforthebuildingwillcontinue,evenifthebuildingnolongermeetsthedefinitionof"residentialbuilding",untilthefirepolicylapsesoriscancelledorEQCoverforthebuildingiscancelled.

Ifwhenthecontractoffireinsurancecomestoanend,whetherforrenewalorotherwise,thebuildingnolongermeetsthedefinitionof"residentialbuilding",EQCoverwillnotcontinueforthebuilding.

EQCover

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D e f i n i t i o n o f “ r e s i d e n t i a l b u i l d i n g ”Theterm"residentialbuilding"isdefinedinsection2(1)oftheEarthquakeCommissionAct1993.A"residentialbuilding"isanypremisesthatareself-containedandthataresomebody'shomeorholidayhomeorthatarecapableofbeing,andareintendedbytheownertobe,somebody'shomeorholidayhome.

Residentialbuildingsinclude:

{ Houses { Flats { Apartments { Holidayhomes

Servicedapartments,motelunits,hotelroomsandboardinghouseroomsarenotcovered.However,staffandthemanager'saccommodationarecovered-that'swheretheylive,sotheyareresidentialbuildings.

W h a t a r e " s e l f - c o n t a i n e d " p r em i s e s ?Self-containedpremisescontainallfacilities(living,sleeping,cookingandbathing)fortheoccupant(s)toliveinaself-sufficientmanner.Premisesarenotself-containedwheresomeessentialfacilities(suchascookingorbathingfacilities)havetobesharedbetweendifferenthouseholds.

Thesefacilitiesdonothavetobeintheonestructurebuttheymustbefortheexclusiveuseofasingle household.Forexample,thepropertymayhaveahousethatonlyhasliving,sleepingandkitchenareaswiththeablution(bathing)buildinginthegrounds.Asthewholepropertyhasthefacilitiestoenabletheoccupyinghouseholdtoliveinaself-sufficientmannerandthefacilitiesarenotsharedwithotherhouseholds,thesewillbe"self-contained"premisesforEQCpurposes.

B o r e sIfthewatersupplyforthedwellingissuppliedfromabore,EQCcoversonlyphysicallossordamagetotheboreitselfcausedbyaqualifyingnaturaldisaster,andonlyiftheboreislocatedwithin60mofthedwelling.Achangeinthewaterqualityorthedisappearanceoftheaquifer(watercourse)isnotcoveredbecauseitdoesnot involvephysicallossordamagetotheinsuredproperty(thebore).

C o n t e n t s C o v e r ( " p e r s o n a l p r o p e r t y " )EQCinsuressomepersonalbelongingsas"personalproperty",whichisatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993,whenthatpersonalpropertyisinsuredunderacontractoffireinsurance.PersonalpropertyisinsuredunderEQCoverforitsreplacementvalue(or,ifitisinsuredagainstfireonanylessfavourablebasis,onthatbasis),upto$20,000.

"Personalproperty"isdefinedintheActas"propertythatislocatedinoronaresidentialbuilding;andincludespropertythatisusuallysolocatedbutistemporarilyremovedfromthebuildingforanyreason;butdoesnotincludeanypropertyusedsolelyorprincipallyforcommercialpurposes".

Inthelistofexclusions(seepage21)thefollowing,whileinsuredbyaprivateinsurerunderacontractoffireinsurance,arenotcoveredbyEQC:

{ Worksofart-generallyworksofartthatareone-offitemsandarethosewhoseprimefunctionisdecorativeorcommunication,andwhichareanartist'soriginalwork(whichmaybepaintings,ceramics,glassorothermediums)

{ Anymotorvehicle-avehicledrawnorpropelledbymechanicalpowerandanypartsoraccessoriesofa

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motorvehicle.Underthisexclusion,coverofitemssuchasmobilityscooters,motorisedwheelchairs,orscootersareexcluded

{ Anyjewellery,preciousstones,money,securities,documentsorstamps.

" R e s i d e n t i a l L a n d " C o v e rWherearesidentialbuildingisinsuredunderEQCover,the"residentialland"onwhichthatbuildingissituatedisalsoinsuredunderEQCover.Accordingly,barelandisnotcovered.

EQCoverforresidentiallandisnotincludedintheEQCcapof$100,000thatappliestoresidential buildings,butisadditionalandseparate.

"Residentialland"isatermdefinedinsection2(1)oftheEarthquakeCommissionAct1993asfollows:

Residential landmeans,inrelationtoanyresidentialbuilding,thefollowingpropertysituatedwithintheland

holdingonwhichtheresidentialbuildingislawfullysituated:

(a) Thelandonwhichthebuildingissituated;and

(b) Alllandwithin8metresinahorizontallineofthebuilding;and

(c) Thatpartofthelandholdingwhich-

(i) Iswithin60metres,inahorizontalline,ofthebuilding;and

(ii) Constitutesthemainaccesswayorpartofthemainaccesswaytothebuildingfromthe

boundaryofthelandholdingorislandsupportingsuchaccesswayorpart;and

(d) Allbridgesandculvertssituatedwithinanyareaspecifiedinparagraphsa)toc)ofthisdefinition;and

(e) Allretainingwallsandtheirsupportsystemswithin60metres,inahorizontalline,ofthebuilding

whicharenecessaryforthesupportorprotectionofthebuildingorofanypropertyreferredtoinany

ofparagraphs(a)to(c)ofthisdefinition.

Section19oftheEarthquakeCommissionAct1993setsoutthebasisonwhichresidentiallandisinsured:

SubjecttoanyregulationsmadeunderthisActandtoSchedule3,wherearesidentialbuildingis

deemedtobeinsuredunderthisActagainstnaturaldisasterdamage,theresidentiallandonwhichthatbuilding

issituatedshall,whilethatinsuranceoftheresidentialbuildingisinforce,bedeemedtobeinsuredunderthis

Actagainstnaturaldisasterdamagetotheamount(exclusiveofgoodsandservicestax)whichisthesumof,inthe

caseofanyparticulardamage,-

(a) Thevalue,atthesiteofdamage,of-

(i) ifthereisadistrictplanoperativeinrespectoftheresidentialland,anareaofland

equaltotheminimumareaallowableunderthedistrictplanforlandusedforthe

samepurposethattheresidentiallandwasbeingusedatthetimeofthedamage;or

(ii) anareaoflandof4000squaremetres;or

(iii) theareaoflandthatisactuallylostordamaged-

whicheveristhesmallest;and

(b) Theindemnityvalueofanypropertyreferredtoinparagraphs(d)and(e)ofthedefinitionoftheterm

"residentialland"insection2(1)thatislostordamaged.

.

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Retainingwallsthatarenecessaryforthesupportorprotectionoftheresidentialbuildingortheinsuredland,includingthemainaccessway,areinsuredifwithin60metresinahorizontallineofthebuilding.

Bridgesandculvertsareinsurediftheyarewithin8metresina

horizontallineofbuildingsorwithin60metresinahorizontallineiftheyformpartofthemainaccessway.

Dwellings,personalpropertyand

outbuildingsareinsured.

Landwithin60minahorizontallineofthehousewhichforms

themainaccesswayisinsured(butnotartificial

surfacesthereon).

Landunderthebuildingsandwithin8metresinahorizontallineofthebuildingsisinsured(butnotartificialsurfacesthereon).

Landareanotinsured.

Watersupplyservices(includingbores),drainage,sewageandgaspipes,telephoneandelectricity

lines.Maximumlengthinsuredupto60metresinahorizontalline

fromthebuilding(ifownedbytheownerofthedwellingortheland).

EQCoverdiagram

Mul t i p l e a c c e s sw a y sIftheresidentialbuildinghasseveralaccessways(drivewaysand/orpathwaysand/orseparatedriveways)onlythemaindriveway(orpathwayifthepropertydoesnothaveadriveway)iscovered,upto60minahorizontallinefromthebuilding.

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P r e m i u mForcontractsoffireinsurancemadeonorafter1February2012,EQCovercostsfifteencentsforevery$100insured(0.15%)wheretheperiodofinsuranceisoneyear.Themaximumforaone-yearperiodis$150forcoverof$100,000onthedwellingand$30forcoverof$20,000onpersonalbelongings.

Wheretheperiodofinsuranceisotherthanoneyear,aprorataproportion(onadailybasis)oftheamountthatwouldbepayableforaone-yearperiodispayable,roundedtothenearest5cents.

Coverforlandisincludedatnocost.

E x c e s s e s

P r o p e r t i e s c o n t a i n i n g o n l y o n e dwe l l i n g

P r o p e r t i e s c o n t a i n i n g m o r e t h a n o n e dwe l l i n gBuildings-

{ $200multipliedbythenumberofdwellingsinthebuildingor1%oftheamountpayable,whicheveristhegreater.

Land-

{ $500multipliedbythenumberofdwellingsintheresidentialbuildingwhichissituatedontheland,or10%oftheamountpayable,whicheveristhegreater,toamaximumof$5,000.

Damagetobothadwellingandpersonalproperty-

{ Whenapersonmakesaclaimfordamagetobothadwellingandpersonalpropertylocatedinthatdwellingandthedamageiscausedbythesamenaturaldisaster,asingleminimumpaymentof$200appliesacrossbothclaims.

E x c e s s - % o f c l a i m

M i n . p a y a b l e M a x . p a y a b l e

DwellingPersonalpropertyLand

1%-

10%

$200$200$500

$1,150$200$5,000

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S e c t i o n 2 8 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - C a n c e l l i n g o r L i m i t i n g o f E Q C o v e rA“Section28”noticeisplacedonapropertytitleifEQCoverhasbeencancelledorlimited.EQCcanonlycancelorlimitcoverinspecificcircumstancesassetoutinSchedule3oftheEarthquakeCommissionAct.EQCwill advise,inwriting,anypersonaffectedbythecancellationorlimitationofEQCoverandexplainwhyithasdoneso.Thenoticecontinuestoapplyevenifapropertyissold.

InmanycasesEQCovercanbereinstatedandthepropertyownerneedstocontactEQCtofindoutwhatwillhavetobedone,suchasremedialworks,inordertoreinstateEQCover.

S e c t i o n 2 9 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - G S TSection29(3)oftheEarthquakeCommssionAct1993containsthefollowingprovisionregardinggoodsandservicestax:

(3) WhereanypropertyisinsuredunderthisActforitsreplacementvalueandtheCommissionissatis

fiedthatgoodsandservicestaxhasbeenpaidorwillbepayablebyaninsuredinthecourseofreplac

ingorreinstatingtheproperty,theamountofanypaymentundersubsection(2)ofthissectionshallbe

increasedbytheamountofgoodsandservicestaxpaidorpayablebytheinsured.

Whereverinthisguideamonetaryamountisshownordescribed(coverorpremium)thenthatamountisex-cludingGST.

S e c t i o n 3 0 o f t h e E a r t h q u a k e C o m m i s s i o n A c t - O t h e r I n s u r a n c eSection30oftheEarthquakeCommissionAct1993isheaded"InsuranceotherwisethanunderthisAct".It providescertainrulesforsituationswhere,upontheoccurenceofnaturaldisasterdamagetoproperty coveredbyEQCover,thepropertyisalsoinsuredagainstthatdamageunderacontractofnaturaldisaster damageprovidedbyaninsurancecompany.Theinsurancecompany'scovermightbeeither"groundup"coveror"topup"cover.

Wheretheinsurancecompanyhasprovidednaturaldisastercoverforthepropertybywayof"groundup"cover,theinsurancecompany,notEQC,isliabletopayforthedamagecoveredbytheinsurancecompany'snaturaldis-astercover.EQCoverwillrespondonlyforsomuchofthedamage(ifany)asexceedstheamountpayablebytheinsurancecompanyunderthecontractandtheexcessthattheinsuredpersonmustbearunderthecontract.

Wheretheinsurancecompanyhasprovidednaturaldisastercoverforthepropertybywayof"topup"cover-thatis,thecoverisinexcessoftheamountofEQCover-EQCoverappliesasnormal.The"topup"coverappliestoanydamagebeyondwhatiscoveredbyEQCover.

ItisimportanttobeawarethatincontractswhereEQCoverisinvolved,andthesemaybestraightdomesticpoliciesthroughtocommercialcontractsthathaveresidentialbuildingsonthem,itmustbemadeclearthattheinsurer'snaturaldisastercoverisoverandabovethatprovidedbyEQC.

TheEQCpremiumispayablewhereveracontractoffireinsuranceisenteredintoinrespectofa"residentialbuilding"or"personalproperty".Accordingly,theEQCpremiumispayableevenwherea"groundup" naturaldisasterpolicyhasbeenenteredintoforthatproperty,ifthecontractofinsurancealsoinsuresagainstfire.

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ClaimantsmustcontactEQCwithinthreemonthsofthedamagehappening. This three-month rule is pre-scribed by law and cannot be extended.

TheEQCfreephonenumberis0800326243or0800DAMAGE.ClaimscanalsobelodgedontheEQCwebsitewww.eqc.govt.nz.Itisbetterfortheclaimanttodothisratherthangettingtheirbroker,agentorinsurancecompanytocall.

EQCwillasktheclaimantforanideaoftheextentofdamageandwhomtheyareinsuredwith.EQCwilltellthemwhetheralossadjusterwillcalltohelpwiththeclaimorwhethertheycangoaheadwithgettingrepairsdone.EQCwillfollowthisupinwriting.

C l a i m a n t s c a n : { Maketemporaryrepairsforsafetyortopreventfurtherdamageordiscomfort. { Getessentialservicesliketoiletsandwatersystemsrepairedimmediately,buttheyshouldkeep,

documentorrecordeverythingtherepairerreplaces(andkeepacopyofthebill). { Cleanupspillagesorcrockeryandglassbreakages(buttheyshouldn’tthrowanythingnotperishableaway

yet). { Disposeofperishableslikeruinedorspiltfood.(Theyshouldlisttheitemsastheybury,burnordump

them.)

If possible, claimants should take photos before moving and repairing anything.

Any reimbursement for temporary or urgent repairs is, of course, subject to EQC acceptance of a valid claim. If accepted, the cost will be deducted from any total amount owed to you under EQCover.

EQCover is subject to the conditions specified in Schedule 3 of the EQC Act. Those conditions include various powers for EQC to decline (or meet part only of) a claim in specified circumstances.

MakingaClaimwithEQC

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D w e l l i n g s

EQCoverislimitedto$100,000foreach"dwelling"inaresidentialbuilding.Includedinthe EQCoverfortheresidentialbuildingiscoverforallappurtenantbuildingsandstructures,andforcertain servicestothatbuilding,thatarecoveredunderthefirepolicyforthebuildingandthatcomewithinthedefinitionof"residentialbuilding"insection2(1)oftheEarthquakeCommissionAct1993.

Theamountofinsuranceavailableforaresidentialbuildingistheleastofthefollowingamounts:

{ Ifthefirepolicyspecifiesareplacementsuminsuredforwhichthebuildingisinsuredagainstfire,theamountofthatsuminsured

{ IfthefirepolicydoesnotspecifyareplacementsumforwhichthebuildingisinsuredagainstfirebutdoesspecifyanamounttowhichthebuildingistobeinsuredundertheEarthquakeCommissionAct,thenthatamount

{ Theamountarrivedatbymultiplying$100,000bythenumberof"dwellings"intheresidentialbuilding

IfthefirepolicyspecifiesanamounttowhichthebuildingistobeinsuredundertheEarthquakeCommissionAct1993,thatamountmustbenolessthantheamountarrivedatbymultiplying$1,000bytheareainsquaremetresoftheresidentialbuilding.

EQCwillpayGSTifGSTispayablebytheclaimanttoreinstateproperty.

CalculatingEQCover

g a r a g e d w e l l i n g g r a n n y f l a t s h e d

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Forcoverotherthanthe$100,000perdwellingtoapply,theremustbeeitherareplacementsumspecifiedoranEQCsumspecified.Thesquaremetreformulacannotbeusedonanopen-endedreplacementpolicyunlessitexpresslystatesaparticularsumforwhichthepropertyisinsuredforEQCpurposes.

B o a r d i n g h o u s e s a n d /o r b u i l d i n g s w i t h i n d i v i d u a l l y r e n t e d r o om sInsomecaseslandlordssetupbuildings(sometimesformerdwellings)tobeaboardinghouseortoleaseoutroomsonanindividualbasis.TheusageofbothtypesofpropertiesandhowEQCrespondsissimilar.

Thesepropertieshave:

{ Residentswholeasetheirownnonself-containedroom, { Sharedcommunalfacilitiessuchaskitchenandbathrooms.

However,EQCoverDOESNOTAPPLYastheself-containedtestfailsbecause:

{ Eacharealeasedforthesoleuseoftheoccupierisnot"self-contained"becausesomeessentiallivingfacilitiesareshared

{ Thewholebuildingisnotbeingusedbyasinglehouseholdasahome

Ifthereisanon-sitemanagerwhousesoneofthenonself-containedrooms,againEQCoverDOESNOTAPPLY.

Replacementvalue=$250,000.Singledwelling.

Open-endedreplacementvalue,basedonareaof220m2.Singledwelling.NoreplacementsumorEQCsumspecified.

Indemnityvalue=$60,000.NoreplacementsumorEQCsumspecified.Singledwelling.

Dwellingwithaself-containedgrannyflatinsamebuilding.Replacementvaluefordwellingandflat=$250,000.

Dwellingwithaself-contained,detachedgrannyflat.Replacementvaluebasedonarea.Dwelling200m2,flat80m2.

$100,000

EQCoverislimitedtoamaximumof$100,000.

$100,000.

$200,000becausethebuildingcontainstwodwellings,providedbothdwellingsaredisclosedtotheinsurerwhenthecontractoffireinsuranceismadeorrenewed.

EQCoverislimitedto$100,000foreach dwelling(orreplacementvalueiflower).

EQCover

{ Ifthefirepolicycoversaresidentialbuildingforareplacementsuminsured,thesizeofthe dwellingcan'tbeusedtocalculateEQCover.

{ Ifthegrannyflatisnotself-contained,thenthecoverprovidedforitisincludedinthecapforthemainresidentialbuilding.

Example

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F r a c t i o n a l ow n e r s h i pRecentlyanewwayofpurchasingresidentialproperty,by“fractionalownership”,hasbecomeincreasinglypopular.

Withfractionalownershiptheresidentialpropertyisbrokenupintoasetnumberofsharesandeachofthesesharesissold.Theseresidentialpropertiesaregenerallylarger(morevaluable)dwellingsoncoastallandorinlandruralestates.

Unliketimeshareswhereeachpurchaserisgiventherighttoonlyusethepropertyforasetnumberofweeksperyearoratasettime,fractionalownershipmeanstheshareholdersthemselvesdecidehowthepropertyistobeused,includinghoworwheneachshareholdercanuseit.

Ifthepropertyisstillbeingusedasahomeorholidayhomebytheowners,thenEQCwillcontinuetocoverit.

Ifitisgoingtobeusedonlyforaholidayletorasabedandbreakfastforexample,thenEQCovergenerallydoesnotapply.

C o n t r a c t w o r k s p o l i c i e sIncaseswhereadwellingcannotbelivedin(suchasundergoingextensiverenovationsorconversiontoflats)itwillnolongerbea"residentialbuilding"undertheEarthquakeCommissionAct1993.Thebuildingneedstobefullyinsuredunderacontractworkspolicy.

Iftherenovations/alterationsdonotaffecttheself-containednatureofadwellinganditcanstillbelivedin,EQCoverwillapplyunderthecontractworkspolicy.

S h ow h ome sEQCdoesnotprovidecoverforbuildingslikeshowhomesthatarepurelyusedtoshowcaseaproductordesignastheyarenobody'shomeandthereisnopresentintentionthattheywillbelivedinassomebody'shome.

Ifthedwellinghoweveriscapableofbeinglivedin,isonthemarkettobesoldandtheintentionisthatonceithassolditwillbelivedin,EQCoverdoesapply.

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" P e r s o n a l P r o p e r t y ""Personalproperty"isdefinedas”...propertythatislocatedinorona residentialbuilding;andincludespropertythatisusuallysolocatedbutis temporarilyremovedfromthebuildingforanyreason...”EQCoverforpersonal

propertyislimitedto$20,000perpolicy.

P e r s o n a l p r o p e r t y a t m u l t i p l e s i t u a t i o n s b u t i n s u r e d u n d e r o n ep o l i c yInordertoinsurepersonalpropertyunderonepolicydocument,wherethereisintendedtobemorethanoneinsuredsituationorwheretheinsuredsituationscontainpersonalpropertybelongingtomorethanoneperson(whereitisintendedthatthepropertyshouldbeseparatelyinsured,e.g.inthecaseofresthomeresidents);thefollowingendorsementcanbeused:

“For the purposes of Section 20 of the EQC Act 1993, each situation (and/or identified resident) has a separate fire insurance contract in respect of each such situation or resident.”

Thisendorsementwillthenenableeachsituationorresidenttohavepersonalpropertyinsuredupto$20,000.

P e r s o n a l p r o p e r t y i n s t o r a g eEQCovercoversresidentialpersonalpropertyinstorage,eithertemporarilystorediftheintentionisfortheper-sonalpropertytoreturntoaresidentialbuildingatastoragefacilityuntiltheyarethensentontoanewresiden-tialbuilding,ortemporarilyremovedfromaresidentialbuildingandthenreturningtothatresidentialbuilding.EQCoverisstilllimitedto$20,000.

P e r s o n a l p r o p e r t y i n t r a n s i tIftheinsurer’scontentspolicyexcludescoverwhileintransit,thereisstillEQCoverwhilethepersonalpropertyisintransitsolongasthecontentspolicyremainsinforce.Ifacontentsintransitpolicyistakenoutandincludescoverforfire,thenEQCoverapplies.

P e r s o n a l p r o p e r t y ( i n c l u d i n g l a n d l o r d ’s p e r s o n a l p r o p e r t y ) a s a s umi n s u r e d o r a s a p o l i c y e x t e n s i o nIfpersonalpropertyislistedonthepolicyaspartofthescheduleofpropertyinsured,EQCovershouldbeincludedforupto$20,000,oranylessersumspecifiedforthepersonalproperty.

Ifthecoverforpersonalpropertyisincludedasapolicyextension,EQCoverDOESapply.

IfcoverforpersonalpropertyisincludedinthedwellingsuminsuredEQCoverappliesandanextrachargeshould

bemade.

P e r s o n a l p r o p e r t y - i n t e r n a t i o n a l s t u d e n t s ' p e r s o n a l p r o p e r t y c o v e rTherearevariousschemesavailableforcoveringthecontentsofinternationalstudentswhentheyarestudyinginNewZealand.Unliketravelpoliciesthatcovercontentswhileonholiday,thiscoverisgenerallyfortheperiodthattheyareresidingandstudyinginNewZealand-generallyayearormore.

AscoverisforcontentsthatareinNewZealand,forstudentsthatarelivinginNewZealand,EQCoverappliesuptothemaximumEQCcapof$20,000perstudentand/orpolicy,providedthepolicyinsuresagainstfire.

However,studentsmustbelivinginaresidentialbuilding,asdefinedbytheEQCAct,forthecontentscovertoapply.Ifthecontentswillnotusuallybelocatedinaresidentialbuilding(asdefined),theywillnotbepersonalproperty(asdefined)andEQCoverwillnotapply.Thesestudentswillusuallybelivinginhostels,whicharenotresidentialbuildingsasdefinedbytheEQCAct.

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M i x e d U s a g e P r o p e r t i e sNote:TheexamplesbelowshowthemaximumcoveravailableundertheEarthquakeCommissionAct.Aresidentialbuildingisdeemedtocompriseonedwellingunlessthe existenceofahighernumberofdwellingsisdisclosedtotheinsureratthetimethe contractoffireinsuranceismadeorrenewed.

E x a m p l e 1Fiveself-containedapartmentsandoneretailshopinabuildingwithasingleownerandareplacementvalueof$1,000,000.

EQCoverislimitedto$500,000forthebuildingbecausetherearefivedwell-ingsinthebuilding:5x$100,000=$500,000,providedtheexistenceofahighernumberofdwellingsisdisclosedtotheinsureratthetimethecontractoffireinsuranceismadeorenteredinto.

Asmorethan50percentofthebuildingcomprises"dwellings",EQCwouldcoverdamageanywhereinthebuilding.

E x a m p l e 2 Threeflatsandaretailshopinabuildingwithasingleownerandareplacementvalueof$250,000.

EQCoveris$250,000.

As50percentofthebuildingcomprises"dwellings",EQCwouldcoverdamageanywhereinthebuilding.

E x a m p l e 3 Oneapartment,officesandretailshopsinabuildingwithoneownerandareplacementvalueof$1,000,000.

Thedefinitionof"residentialbuilding"includesa"partofabuilding"that comprises1ormore"dwellings"iftheareaofthedwellingsis50%ormoreofthetotalareaofthatpartofthebuilding.Thetopfloorisa"partofabuilding"thatmeetsthisdefinition.Accordingly,thatpartcountsasa"residential building".

EQCoverislimitedto$100,000perapartment.1x$100,000=EQCoverof$100,000fortheresidentialpartofthebuilding.

OnlydamagetothetopflooriscoveredbyEQC.Thisbuildingasawholeisnotaninsured"residentialbuilding",aslessthan50percentofthewholebuildingcomprises"dwellings".

apartment

apartment

apartment

apartment

apartment

retail shop

retail shop

res res res

apartment

offices

offices

offices

offices

retail shops

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B o d y c o r p o r a t e b u i l d i n g s / a p a r t m e n t c o m p l e x e sEQCover calculation scenarios for a complex of 12 apartments in a body corporate building

{ Replacementvalueofbuilding=$2m. EQCover=$1.2m(i.e.12x$100,000).

{ Replacementvalueofbuilding=$1m. EQCoverlimitedto$1m.

{ Insuredforindemnityonly.EQCoveris$100,000per apartment,i.e.$1.2m.

{ {

R e s t H o m e s

Theresthomeshownaboveisasinglebuilding,containingdormitorytypeaccommodation,andfull accompanyingfacilities.Thebuildingalsoincludesself-containedaccommodationfortheowner/manager.

EQCoverwouldbe$100,000fortheresthomepartand$100,000fortheowner’s/manager’saccommodation.

Contentsoftheresthomeandcontentsofthemanager’saccommodationcanbecoveredforupto$20,000+GSTeach,providedtheymeetthedefinitionof"personalproperty".

Iftheresidents’effectsarecoveredbytheresthomepolicy,eachresidentisabletoobtainupto$20,000+GSTofcoverprovidedthepolicystatesthatitistotakeeffectasaseparatecontractofinsuranceinrespectofeachresidentorsituation.

ResthomesarecoveredbyEQCduetospecificinclusionintheEarthquakeCommissionAct:

“Residentialbuildings"means-

(b)...anybuildingorpartofabuilding(whetherornotfixedtoland,ortoanotherbuilding,part,or structure)inNewZealandwhichprovideslong-termaccommodationfortheelderly...”

*Pleaserefertopage14forafullexplanationofEQCoveronpersonalproperty.

apartment 1

apartment 2

apartment 3

apartment 4

apartment 5

apartment 6

apartment 7

apartment 8

apartment 9

apartment 10

apartment 11

apartment 12

manager’s accommodation

rest home

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R e t i r e m e n t V i l l a g e s & R e s t H o m e C o m p l e x e s

C a l c u l a t i o n s f o r r e t i r em e n t v i l l a g e s & r e s t h ome c omp l e x e s

Example EQCover Total EQCover

*Villa-styleaccommodation (eachvillacontainingonedwelling)

Upto$100,000. $500,000.

Villapersonalproperty Upto$20,000. $100,000.

Garages Includedincoverforvillas. -

Resthomeaccommodation/administration,diningetc

Equatestooneself-containeddwelling. $100,000.

*Resthomecontents-in-cludesplant/equipment/stock

Upto$20,000. $20,000+GST

*Resthomeresidents'effects Upto$20,000. $20,000xnumberof residentsorsituations.

Hospital Ifprovidingahigherlevelofresthomecare(andthereforelong-termaccommodationfortheelderly).

Ifhospitalisprovidingcarewherepatientsareadmittedforaparticularreason,treatedandthenreleasedbacktotheresthome

Includedincoverforresthome.

Includedincoverforresthome,provideditisusedforthepurposesofthe residents and is appurtenant tothemainbuilding.

Garagesforvillas

Villa-styleaccommodation

Resthomeadministration,dining,laundry,livingareas

Hospice

Resthomeaccommodation,notself-contained

Chapel

Hospital

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H o l i d a y A c c o m m o d a t i o n

Mo t e l s

EQCoverislimitedto$100,000+GSTforthemanager’saccommodationonly.

B e d a n d B r e a k f a s t A c c ommod a t i o n ( B & B ’s )EQCoverdoesapplytoaB&Bwheretheownerstilllivesinthehousebutrentsoutacoupleofbedroomsandwheretheowner’susablespaceismorethan50%ofthebuilding.Evenifboththeownerandguestsusethesameareas,EQCoverwouldapplyaslongasthespaceusedbytheownerismorethan50%.

Example 1

A200m2B&Bwithfourbedrooms-threebedroomswithatotalfloorareaof60m2areavailableforguests.Thisis75%ofbedroomsbutonly30%offloorarea.

EQCoverappliesastheowners’useablespaceismorethan50%oftheproperty.

Example 2

Atwo-levelB&Bwithdownstairsavailableforguests,containingtwobedrooms,loungeetc,withatotalfloorareaof100m2.Theupstairs,forfamilyuseonly,hastwobedrooms,lounge,kitchenetc,andatotalfloorarea(90m2)only.

EQCoverappliestotheupstairsarea(90m2)only.

Example 3

Propertyhastwobuildingsonit,oneforguestsandoneforowners.Onlytheowners'buildingiscoveredeveniftheguestshavetousethebathroomand/orkitchenintheowners'residence.

motel accommodation

manager’s accommodation

motel accommodation

Chapel Classifiedasanappurtenantbuildingorstruc-ture(ifforthesoleuseoftheresidents)toresthomecomplex.

Includedincoverforresthome/villagecomplex.

Hospice Doesnotprovidelong-termaccommodationfortheelderly.

Notcoveredinitsownright,butmightbeanappurtenantbuildingifusedforthe purposesoftheresidents.

* Inordertoinsurecontentsinmorethanonesituationunderthesamepolicyorresidents’effects,the followingendorsementcanbeused,

“For the purposes of Section 20 of the EQC Act 1993, each situation (and/or identified resident) has a separate fire insurance contract in respect of each such situation or resident.”

Thisendorsementwillthenenableeachsituationorresidenttohavecontentsinsuredupto$20,000

Forexcessesfordamagetobuildingscontainingmultipleresidentialunits,seeExcessesonpage8.

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H o l i d a y H ome sEQCcanprovidecoverforholidayhomesthatarerentedoutiftheintentionoftheownersistouseitwhenevertheywishandtheystoretheirownpossessionsthere,nomatterhowminimaltheuseis,providedthecontractoffireinsuranceremainsinforce.

When EQCover on holiday homes DOES NOT apply:

{ Iftheholidayhomeissetuppurelyasacommercialenterpriseandtheownersdonotuseitorintendtouseitfortheirownpurposes,thenEQCoverDOES NOT apply.

{ Ifanorganisationownsholidayhomespurelyforthebenefitoftheirmembers,andthesememberspaytostayintheholidayhomes,EQCoverDOES NOTapply.

S e r v i c e d A p a r tm e n t s a n d T i m e - S h a r e sServicedapartmentsandtime-sharesarenotcoveredbyEQCunless:

{ Thereisaself-containedmanager’sflat,inwhichcasethatflatiscovered;or { Iftheowner/manager’spartoftheaccommodationisgreaterthan50%ofthetotalareaofthebuilding.

Inaboardinghousewhichhasamanagerwhousesoneofthebedrooms(notself-contained),thereisnoEQCover.

Inabuildingthathasbothservicedandowner-occupierapartments,EQCoverappliestotheowner-occupierapartmentsbutnottotheservicedapartments.

The 30-day rule (serviced apartments and time-shares)

Itwouldappearthatinsomelocalities,oncesummerisover,servicedapartmentsandtime-sharesreverttolongtermpermanentrentals.Iftheapartmentisrentedlongterm(formorethan30daysconsecutively)thenitisapermanenthomeforthatperiodandEQC’scovercanapply.

TodeterminewhetherEQCoverisapplicable,the50%ruleapplies.Thatis,ifoverayear,themajorityofthetimethebuildingisusedasatime-shareorservicedapartmentthenEQCoverDOESNOTapply.Ifthemajorityofthetimeitisusedaslong-termaccommodation,thenEQCoverDOESapply.

C a r a v a n sTherearetwodistincttypesofcaravantypeaccommodation.

E x amp l e 1 Thecaravanisabletobetowedtoacampsiteandisthentowedawayoncetheholidayisover.EQCover does not apply.

E x amp l e 2Caravansthataretowedordeliveredtoasiteandare:

{ Self-contained(seePage4fordefinition) { Connectedtolocalservicesorhavetheirownabilitytobeselfsufficient { Cannotbemoved(wheelsremoved,fixedtopilestructure),EQCover does apply.

Ifthesecaravansareinsuredfor“marketvalue”orindemnityvalue,EQCoverisautomatically$100,000oritslowerreplacementvalue.

Ifcaravanisinsuredforreplacement,EQCoverislimitedbythecapof$100,000.Ifthereplacementsuminsuredisforexample$30,000,EQCoverwouldalsobe$30,000.

Seepage11foracompleteexampleoncalculatingEQCoveronresidentialbuildings.

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SometimesanintermediaryinNewZealandoroffshorearrangesoffshorecoverforresidentialpropertylocatedinNewZealand.

EQCoverstillappliesinthissituationandremittanceoftheEQCpremiumismade directtoEQC,generallywithin60daysoftheinception/expirydateofthecover (unlessotherarrangementshavebeenmade).

Therearesituationswhereclientsdon’twantfireinsurancecoverontheirresidentialpropertyorareunabletopurchaseinsuranceviaaninsurancecompany,butstillwishtohavethecoverprovidedbyEQC.

InsituationslikethisEQCcorrespondseitherdirectlywiththeclientorthroughanintermediary.

IfEQCagreestoprovidecover,thetermsandconditionsareusuallythesameasfortheEQCoverprovidedwhenyouenterintoafirecontractthroughaninsurancecompany.AnyexclusionsorpropertytitlenotationssuchasSection74oftheBuildingAct,stillapply.

TheGovernmenthasstatedanintentiontoreviewtheEQCschemeinthenearfuture.EQCwillnotprovidedirectcovertonewclientsinadvanceofthatreview.

IfyouhaveanyenquiresorwouldlikefurtherinformationabouteitheroffshoreplacementsorcoverdirectwithEQC,pleasecontact: Lee Patton ComplianceManager Phone:049016665 Email:LPatton@eqc.govt.nz

OffshorePlacements

EQCover Direct withEQC

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1. Anypropertythatisnottangibleproperty.

2. Anymotorvehicle(beingavehicledrawnorpropelledbymechanicalpower),oranypartsof,or accessoriesto,amotorvehicle.

3. Anytrailer(beingavehiclewithoutmotivepowerthatiscapableofbeingdrawnorpropelledbya motorvehicleandthatisnotbeingusedasadwelling),oranypartsof,oraccessoriesto,atrailer.

4. Anyvessel(beinganythingmadetofloat,whetheritisfixedorfree,andwhetherornotithasany meansofpropulsion),oranypartsof,oraccessoriesto,avessel.

5. Anyaircraft,oranythinginoronanaircraft.

6. Anybush,forest,tree,plant,orlawn.

7. Anygrowingcrops(includingfruittreesandvines)orcutcropsintheopenfields.

8. Anyexplosives.

9. Anyanimals,includinglivestockandpets.

10. Anyroad,street,drive,path,bridge,orculvertotherthanagangway,ladder,accessplatform,orother formofaccess,constructedinaresidentialbuildingorbeinganintegralpartofaresidentialbuilding.

11. Anydrain,channel,tunnel,orcutting,unlessusedtoconnectpartsofoneormoreresidential buildings.

12. Anydam,breakwater,mole,groyne,fence,pole,orwallthatdoesnotconstituteanintegralpartofa residentialbuilding.

13. Anyreservoir,swimmingpool,bath,spapool,tank,orwatertowerotherthan-

a) Areservoir,swimmingpool,bath,spapool,tankorwatertowerthatconstitutesanintegral partof,andthatiswithin,aresidentialbuilding;or

b) Areservoirortankusedinaresidentialbuildingasastoragevesselforanyliquidproduct;or

c) Awatertankformingpartofthewatersupplytoaresidentialbuilding;or

d) Aseptictank.

14. Anytenniscourt,whetherinsideoroutsideandwhetherlawnornot.

15. Anyjetty,wharf,orlanding.

16. Anypavingorotherartificialsurface.

17. Anyjewellery,preciousstones,money,worksofart,securities,documents,orstamps.

EQCoverdoesnotcoveranyconsequentiallossIncludinglossbytheft,vandalism,lossofprofits,orbusinessinterruption.NordoesEQCoverincludethecostsofstayingsomewhereelsetemporarilyafteranearthquakeornaturaldisaster.

PropertynotinsuredbytheEQCAct

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ThefollowingnoticeispostedonEQC’swebsite.

C o n d i t i o n a l B u i l d i n g C o n s e n t I s s u e sDo you have a building consent issued subject to Section 74 of the Building Act 2004 or Section 36(2) of the Building Act 1991?

Ifyoudo,therewillbeanentryonyourcertificateoftitlewhichindicatesthatthelandwithinthatcertificateoftitleislikelytobesubjecttospecifiednaturalhazard/s.

Yourlocalcouncilwillhaverequiredthisentrytobeplacedonthecertificateoftitleasaconditionofconsentforbuildingworkonyourproperty.Ifyouhaveanyqueriesabouttheconditionalconsentandtheentryonyourtitle,youwillneedtotalktothecouncilinquestion.EQCdoesnothaveanyauthorityinrelationtothatentryortheconsentconditions.

Implications for EQCover

TheEarthquakeCommissionAct1993(Schedule3,clause3(d))givesEQCadiscretiontodecline,ormeetpartonlyof,aclaimwherethecertificateoftitlefortheaffectedpropertycontainssuchanentry.WhetherEQCwillactuallydeclinepartorallofaclaimonthisgrounddependsinpartonthenatureofthehazardandthenaturaldisasterthatmayoccur.

IfyouhaveanyqueriesaboutyourcoverundertheEarthquakeCommissionAct,pleasecallourfreephonenumber(forbothland-lineandmobilephones)on0800652333.ItwillhelpustoansweryourqueryifyoufindoutfromtheCouncilthenatureofthehazardspecifiedonyourtitlebeforeyoucallEQC.

InsomeinstancesprivateinsurersprovidecoverfornaturaldisasterdamagebeyondEQCover.AnentryonyourcertificateoftitlesubjecttoSection74oftheBuildingAct2004orSection36(2)oftheBuildingAct1991mayalsoaffectthattop-upinsurance.Wesuggestthatyoucontactyourprivateinsurertofindoutwhetherthisentrywillaffectyourinsurancewiththem.

B u i l d i n g A c t 2 0 0 472. Building consent for building on land subject to natural hazards must be granted in certain cases-

Despitesection71,abuildingconsentauthoritythatisaterritorialauthoritymustgrantabuilding consentifthebuildingconsentauthorityconsidersthat-

(a) thebuildingworktowhichanapplicationforabuildingconsentrelateswillnotaccelerate, worsen,orresultinanaturalhazardonthelandonwhichthebuildingworkistobecarried outoranyotherproperty;and

(b) thelandissubjectorislikelytobesubjectto1ormorenaturalhazards;and

(c) itisreasonabletograntawaiverormodificationofthebuildingcodeinrespectofthenatural hazardconcerned.

Section74oftheBuildingAct2004

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73. Conditions on building consents granted under section 72 -

(1) Abuildingconsentauthoritythatisaterritorialauthoritythatgrantsabuildingconsentunder section72mustinclude,asaconditionoftheconsent,thatthebuildingconsentauthority will,onissuingtheconsent,notifytheconsentto,-

(a) inthecaseofanapplicationmadeby,oronbehalfof,theCrown,theappropriate MinisterandtheSurveyor-General;and

(b) inthecaseofanapplicationmadeby,oronbehalfof,theownersofMaoriland,the RegistraroftheMaoriLandCourt;and (c) inanyothercase,theRegistrar-GeneralofLand.

(2) Thenotificationundersubsection(1)(a)or(b)mustbeaccompaniedbyacopyofany projectinformationmemorandumthathasbeenissuedandthatrelatestothebuilding consentinquestion.

(3) Thenotificationundersubsection(1)(c)mustidentifythenaturalhazardconcerned.

74. Steps after notification-

(1) Onreceivinganotificationundersection73,-

(a) theSurveyor-GeneralortheRegistraroftheMaoriLandCourt,asthecasemaybe, mustenterinhisorherrecordstheparticularsofthenotificationtogetherwitha copyofanyprojectinformationmemorandumthataccompaniedthenotification: (b) theRegistrar-GeneralofLandmustrecord,asanentryonthecertificateoftitleto thelandonwhichthebuildingworkiscarriedout,- (i) thatabuildingconsenthasbeengrantedundersection72;and

(ii) particularsthatidentifythenaturalhazardconcerned.

(2) Ifanentryhasbeenrecordedonaduplicateofthecertificateoftitlereferredtoinsubsection(1)(b) undersection641AoftheLocalGovernmentAct1974orsection36oftheformerAct,theRegistrar- GeneralofLanddoesnotneedtorecordanotherentryontheduplicate.

(3) Subsection(4)appliesifabuildingconsentauthoritydeterminesthatanyofthefollowingentriesisno longerrequired:

(a) anentryreferredtoinsubsection(1)(b):

(b) anentryundersection641AoftheLocalGovernmentAct1974:

(c) anentryundersection36oftheformerAct.

(4) ThebuildingconsentauthoritymustnotifytheSurveyor-General,theRegistraroftheMaoriLand Court,ortheRegistrar-GeneralofLand,asthecasemaybe,whomustamendhisorherrecordsor removetheentryfromthecertificateoftitle.

E Q C A c t 1 9 9 3 - S c h e d u l e 3 , c l a u s e 3 ( d )Circumstances where Commission may decline claim-

TheCommissionmaydecline(ormeetpartonlyof)aclaimmadeunderanyinsuranceofanypropertyunderthisActwherethecertificateoftitleforthelandcomprisingtheproperty,oronwhichthepropertyissituatedcontainsanentryundersection36(2)oftheBuildingAct1991oranentryundersection74oftheBuildingAct2004.