New Zealand’s parliament has passed significant changes to the way the Earthquake Commission works – including raising the cap for residential building cover from $NZ100,000 ($95,000) to $NZ150,000 ($142,500).

This means the public insurer will take a larger portion of the risk, with fewer “over-cap” building claims expected to be passed on to private insurers.

However, the $NZ20,000 ($19,000) EQC cover for contents has been removed, so private insurers will now pick up all contents claims.

These changes will be phased in over 12 months from July.

Other changes include an immediate extension of the timeframe for lodging a claim from three months to two years, and an increase in information-sharing between the EQC and private insurers.

The EQC and Insurance Council of New Zealand (ICNZ) welcomed yesterday’s passage of the EQC Amendment Bill.

“The review, and the changes that have been announced, have looked at the lessons, not only from the Canterbury earthquakes but other events since the current law was enacted in 1993,” EQC CEO Sid Miller said.

“Along with these policy changes, we have also introduced a range of operational and organisation changes since 2017 to improve our claim management processes and customer experience.”

ICNZ CEO Tim Grafton says insurers are supportive of the “long-expected” changes, including the cap increase.

“Generally we see this as a good move,” he said. “Over time the value of a loss will have increased.”

He says greater information-sharing will be “helpful” and says insureds should still get their claims in early despite the timeframe extension.

“The longer you take to put in a claim, the more challenging it can be to demonstrate that damage was caused by a particular quake,” he said.

Mr Grafton pointed to the ongoing EQC public inquiry led by former governor-general Silvia Cartwright, saying further changes are “inevitable”.

The inquiry is scheduled to provide an interim report before the end of June.