Extreme weather, climate change & the EQC

Helicopter view of a breach in the flood bank protecting Edgecumbe and a large number of flooded houses

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?

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.

Project contact: David Fleming, Motu Economic and Public Policy Research
Project budget: $154,000
Project duration: May 2017 – March 2019

This project in the media:
How climate change could send your insurance costs soaring Stuff.co.nz
Climate change and insurance – Expert Reaction, Science Media Centre
Insurance: the canary in the coalmine of climate change? Idealog
How can NZ insure homes for climate change? NZHerald
Sea level-prone homes set for insurance cutoff, RNZ
Heads in the sand, houses in the water, Newsroom
Breaking the ice, NIWA

Research and findings:
Insurance, housing and climate adaptation: current knowledge and future research, Motu Economic and Public Policy Research
Climate change and the EQC: first and future research steps, Davic Fleming, Deep South Symposium


Return to the Impacts & Implications programme page
Check out the full list of Deep South Challenge projects

Latest news and updates

Creating a climate-safe Dunedin through community-driven climate action

2018 may well be the year New Zealand gets serious about adapting to our changing climate. Last year, and the start of this one, gave all of us plenty of opportunities to experience a future in which creeping sea level rise and extreme weather – from drought to flood to surprise storm surges – make day-to-day life more precarious and more expensive.

Stormwater, wastewater and climate change: Impacts on our economy, environment, culture and society

In October 2017, the Deep South Challenge released a report into the state of the nation’s storm and waste water infrastructure, in the face of a changing climate. The report garnered significant media attention – not surprising given the infrastructure is currently valued at well over $20 billion.

The Deep South Challenge awards funding to investigate climate-resilient, high-value crops for the whānau of Omaio

The whānau of Omaio in the Bay of Plenty have joined forces with NIWA researchers to explore the viability of climate-resilient, high-value crops for the rohe. The group has won a $250,000 research grant under the Vision Mātauranga programme of the Deep South National Science Challenge to better understand Omaio’s changing climate and how it might support the community to create a local economy based around a high-value product like kiwi fruit.