Extreme weather, climate change & the EQC

helicopter view of two rows of houses surrounded by flood waters

Earthquakes might not yet be predictable, but increasingly, climate change is. Because of climate change, extreme weather events in New Zealand may be getting worse and happening more often. What does this mean for our state-owned provider of natural hazard insurance – the Earthquake Commission (EQC) – and for the communities and regions directly affected by extreme weather?

  • Project Duration: May 2017 ‐ March 2019
  • Project Budget: $154,000

Although the EQC mainly helps households suffering earthquake damage, homeowners impacted by extreme weather like storms, floods or landslips can also make EQC claims for some damages. (For floods and storms, for example, the EQC will only cover the cleanup of debris and mud from the land below a house; it won’t cover damage to the house or its contents.) More frequent and more intense weather can therefore affect the EQC’s long-term sustainability.

Over the last 20 years, the EQC has paid out over $240 million, on more than 17,000 claims, to households affected by non-earthquake disasters. Our project will study these claims, along with data from Statistics NZ, GNS and NIWA, to better understand how the EQC has covered households over time and across regions after extreme weather events; whether insurance pay-outs have supported households and communities to recover economically; and what the EQC’s financial liabilities might be into the future, given climate change projections about extreme weather.

In doing so, we hope to enable local economies and the government to better understand and prepare for the financial challenges of climate change.


The EQC and the 2017 Edgecumbe flood:

“The Earthquake Commission (EQC) will lead the clean-up of flood-damaged properties in Edgecumbe, say Minister Responsible for the Earthquake Commission Gerry Brownlee and Lead Minister for Edgecumbe Anne Tolley. ‘I’ve authorised EQC to clean-up all affected properties in the township, including for those homeowners who do not have insurance,’ Mr Brownlee says. ‘Having the government pick up the tab for cleaning up Edgecumbe means work can get underway while cost-sharing arrangements are finalised with the Whakatāne District Council.” National Party Press Release, May 9, 2017

The EQC in the news:

Dozens of EQC claims made after Wellington slips

EQC insurance cap to increase to $150K

Principal Investigators:

David A. Fleming, Motu Economic and Public Policy Research, david.fleming@motu.org.nz

Ilan Noy, Victoria University of Wellington, ilan.noy@vuw.ac.nz

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