NHCover: What natural disaster cover is included in house insurance?

The Natural Hazards Commission (NHC), formerly called EQC, provides natural disaster insurance for homes and some residential land through what it calls NHCover.

You pay for NHCover through a levy in your home insurance premium. You must have house insurance to be eligible for NHCover.

For information on the best house insurance for you, see our policy and premium buying guide.

Natural disasters covered by the NHC

NHCover provides disaster insurance for:

• earthquakes

• natural landslides

• volcanic activity

• hydrothermal activity

• tsunami

• storms (land only)

• floods (land only)

• fires that occur because of any of the above.

How to get NHC cover

You automatically have NHCover if your private house insurance includes fire insurance – which most policies do. Part of your insurance premium includes a levy that goes to the NHC to manage and settle natural disaster claims.

What the NHC covers around your property

There are two strands to NHCover: buildings and land.

Buildings

In the event of certain natural disasters (excluding storms and flooding), you can receive up to $300,000 (plus GST) worth of NHCover for damage to your home – this is commonly called the NHCover building ‘cap’.

If the damage to your home will cost more to repair than the cap, your private insurer should pay out the balance – up to the claims limit of your policy.

Your private insurer will assess, manage and settle your NHC and private insurance claim.

It’s likely NHC and your private insurer will both deduct an excess.

Land

This strand of NHCover does not cover any buildings. It covers the following land areas.

• The residential land under or within 8 metres of your home and certain outbuildings, like sheds and garages is covered.

• Land under or supporting your main accessway to your property, for up to 60 metres from your home, is covered.

• The land covered will generally sit within the boundaries shown on your property’s record of title.

• A legal right of way over a neighbouring property may also be covered.

• Some cover is provided for bridges, culverts and retaining walls.

Are there problems with NHC land cover?

The land cover is designed to be a contribution towards reinstating land rather than full cover for your land.

It covers the cost of repairing damage to the insured land or the land’s value, whichever is the lesser amount. It can take a long time, with multiple assessors, to determine the full cost of repair and the true value of the land.

The maximum payout is capped at the value of the damaged portion of the insured land.

What the NHC does not cover

NHCover does not apply to any:

• household contents

• vehicles

• tennis courts

• boats or trailers

• fences and pavings

• other artificial surfaces.

How to claim for NHC cover

In the event of a natural disaster, your private insurer will assess, manage and settle your NHC and private insurance claim. So, your first call should be to your insurer.

Any shortfall between the NHCover and the cost to reinstate your home should be covered by your private insurer (within your policy limits).

Making the claim process easier

Your first step should always be to make sure you and your loved ones are safe after a natural disaster.

Your second step is to gather documentation to show the damage and contact your insurer as soon as possible.

• Write down what happened, including the dates and times of all stages of the event and whether any emergency services were involved.

• Take as many photos or videos as possible before and after making any emergency repairs, moving items or throwing out damaged contents.

• Take photos of your mailbox or something that shows your house number (to confirm your address); the front, sides and back of your home, as well as any sheds or garages and damaged land.

• If you have flood damage – mark and measure how high the water reached and take a photo of it before you clean up.

• You’ll need to discuss any non-urgent repairs with your insurer first.

• Keep a record of every time you contact your insurer, what you requested and who you spoke to. This will help if you have any problems settling your claim in a timely manner.

• If your property was damaged in one event (for example, an earthquake) and then is damaged again in another event shortly after, record the new damage and report it to your insurer, too.

• Once your claim is lodged, your insurer will discuss with you how best to evaluate the damage. Engineers or other experts may come in to assess the situation and estimate repair costs. For a land claim, a registered valuer will probably visit.

• When your claim is ready to be settled, your insurer will get in touch and explain the outcome and the settlement amount (minus any excess). Then you can get on with repairs.

If you need help with a natural disaster claim or think your insurer is treating you unfairly, read our tips on how to complain [link coming].

How long NHC claims take to settle

• Straightforward claims can take as little as 3 months.

• More complicated claims can take up to 18 months.

Shared properties and NHCover claims

Whether it’s fee simple, unit title, cross lease or company lease, you need to know what type of property you own and how different property types can affect insurance.

The claims process to repair damage can become complicated when owners of shared property each have different types of insurance or possibly no insurance at all.

Before disaster strikes, it’s best to reach agreement with all parties who share ownership of a property about:

• the level and type of insurance you will get for the shared property

• how the insurance will apply to each separate home and any shared areas.

For any outside areas that aren’t covered by insurance, it’s a good idea to agree who will carry out any repairs and how these repairs will be paid for.