Programme

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.

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