Thursday 6th Jul 2000
Owen Jennings
Media Release -- Other
A Private Member’s Bill from ACT MP Owen Jennings that dissolves the Earthquake Commission and leaves consumers free to
choose both the level of protection against a disaster they require, and who will provide that cover was today drawn
from the ballot in Parliament.
The Earthquake Commission currently provides compulsory disaster insurance cover under all policies of fire insurance,
in respect of residential dwellings and personal property. The maximum limit of the Commission’s liability is $100,000
per dwelling and $20,000 for personal property. Private insurers then underwrite policies in respect of the difference
between the maximum commission liability and the total value at risk.
Owen Jennings said that this is very limited cover considering the limits and exclusions. Bush fires, storms, floods and
many other disasters are not covered by the Commission. There are exclusions for fences, swimming pools, paths and
jewellery for example. Up until 1993 the Commission covered all property insured. This Commission’s cover was
progressively withdrawn over several years with private insurers picking up the difference.
Owen Jennings said that the private market in insurance and re-insurance is capable of coping with the extra risk and
remain focused on delivering a range of consumer led products at a competitive cost.
‘The moves by the State to withdraw from the provision of various insurance markets over several years has been
advantageous to consumers and that this process should proceed. There is no reason to believe the private insurance
market cannot do as professional job as it has done with motor vehicles and commercial property when the State withdrew
from those markets,” said Owen Jennings.
For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at
act@parliament.govt.nz.