19 Jun 2014

EQC increases reinsurance cover

11:16 am on 19 June 2014

The Earthquake Commission has increased its reinsurance against future earthquakes by about a quarter.

After two months of negotiation, the Commission has now garnered protection worth $4.5 billion from insurance companies.

Reinsurance provides a secondary layer of protection to ordinary insurance companies facing big payouts for large-scale calamities.

Together with money payable by the Crown, the new reinsurance deal gives the Earthquake Commission more than $6 billion to cover future quakes.

The $6 billion National Disaster Fund built up since 1945 is being spent in Canterbury, leaving reinsurance as the Commission's only real source of funds.