The Earthquake Commission's assets are now as low as $287 million, and will soon reach the $200m mark that triggers the Crown guarantee to top up the Natural Disaster Fund.
The Crown guarantee has never been triggered in the 73 years EQC has existed.
EQC has written to Minister Megan Woods telling her the state of its net assets.
Ms Woods told Checkpoint with John Campbell she knew this day would come.
How much the government thinks will be needed is "something that needs to be worked through", she said.
"This is something that we've known since we became government, it's something that we've known is coming while we've put together this Budget it has not been far from our thinking, so it is certainly accounted for."
The fund had $6.4 billion in it before the Christchurch earthquakes, and has been depleted due to the earthquakes in Christchurch, Kaikōura and Wellington, and flood events, such as in Whanganui and Edgecumbe.
EQC was working on a plan to refuel the fund as it was a case of "when, not if" New Zealand had another significant earthquake, Ms Woods said.
"But the Crown guarantee sits behind EQC and that's something in which New Zealanders can have a great deal of faith in their level of cover in New Zealand and one of the reasons why reinsurers look on us so favourably."
The fund consists of levies paid as part of home and contents insurance policies, and EQC pays $10m a year to the Crown for its guarantee.