The EQC provides residential coverage of up to NZD$100,000 and NZD$20,000 for contents and insurers give coverage beyond these limits. The issue at hand is at what point is EQC coverage is reinstated.

The EQC and Insurance Council had been trying to work on the issue, but both now believe the court is the best way to get a ruling on how to apply the Earthquake Commission Act of 1993, according to a joint statement.

“EQC and the insurers want to get certainty on this difficult issue as soon as possible to ensure smooth running of the claims settlement process,” says Ian Simpson, chief executive of the EQC. “The important point we all agree on is that it shouldn’t affect payments to people who have suffered losses. It’s really about how much cover EQC is allowed to provide in these unusual circumstances.”

The EQC says new claims must be filed for damage caused by the June 13 quake. Claimants have three months to file. The commission will “work hard to ensure that [June 13’s] shocks won’t set back the work of settling claims and making repairs,” Simpson says in another statement.

Catastrophe risk modeler EQECAT says the most recent earthquake will cause up to $5 billion in additional insured losses. According to reports, New Zealand Finance Minister Bill English questions the credibility of EQECAT’s estimate.

Modeler AIR Worldwide said New Zealand officials now expect that as many as 900 buildings in the Christchurch business district need to be demolished. “There has been significant damage to already weakened buildings,” says AIR.

“The complexity with this event derives from the many structures that are currently being repaired and that may have sustained additional damage, posing additional challenges for estimating incremental damage,” adds the modeler.