All homeowners - not just those with insurance - will be required to pay EQC levies through their rates payments if Labour wins the November 26 election.
The levy would be proportionate based on the rateable values of properties.
Leader Phil Goff announced the party's policy to replenish the Earthquake Commission's coffers today, saying Labour would follow National's lead to treble EQC levies were set to treble under National from a current maximum of NZ$69 a year to NZ$207 a year.
However, Labour's policy document was short on details as to whether that cap would remain, as Labour would make levies proportionate to property values.
Labour would also raise the cover provided by EQC above NZ$100,000 after consultation with EQC and the insurance industry following the election, Goff said.
'Universal'
Making the levy universal for homeowners via the rates system would make the system fairer, Goff said in a statement.
“It extends the coverage and will be calculated in the same way as rates, on the value of a family’s home, which takes into account a person’s ability to pay," he said.
“Everyone who owns a home will now be insured -- eliminating the ‘moral hazard’ of covering uninsured homeowners, which penalises people who pay for private insurance cover. This system is also simpler, keeping compliance to a minimum by incorporating the levy in quarterly rates collections."
Labour earthquake spokesman Clayton Cosgrove said the EQC NZ$100,000 liability cap had to be raised to reflect the steep increase in house values and building costs since 1993, when the cap was set.
“It’s obvious from the destruction we’ve witnessed that the cap has to be brought up to date. NZ$100,000 does not go far enough," Cosgrove said.
“We will work with the insurance industry and EQC to set a new level, and to negotiate the effect of that change on the premiums private insurance can charge," he said.
“It means the Government will be taking on added risk. But right now there’s no alternative as the insurance market is not functioning properly and a lot of people cannot get private cover.”
(Updates with comments from Goff, Cosgrove)
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