Loss estimates in Christchurch are escalating as additional complications and damage are uncovered, according to Marsh.

The broker says Christchurch policyholders are discovering that the sums insured for buildings are often insufficient to pay for their reinstatement, even if they have been recently valued by reputable valuers.

It says construction costs in the earthquake-devastated city increased by around 10% last year, and they are expected to keep rising this year.

“We have also seen demolition costs more than double,” Marsh says, adding that the demand for demolition services is also exceeding availability.

This can be due to a variety of reasons, which include rising demolition and construction costs, the cost of upgrading buildings for fire safety, disability access and seismic strengthening.