New Zealand homeowners will have their EQCover building cap doubled to $NZ300,000 ($262,563) for their insured properties after previously announced changes came into effect on October 1.

The New Zealand Government announced the cap increase in September last year to address rising building and housing costs as well as to reduce the rates of levies from $NZ20c ($17c) to $NZ17c ($14c) per $NZ100 ($87.48) of EQCover.

The government-backed scheme provides home and some residential land cover to privately insured homeowners for natural hazard events, including earthquakes, volcano eruptions, tsunamis and landslides. Further cover is provided to some residential land for storm and flood damage.

Toka Tu Ake EQC says homeowners will have their cap increased upon renewal or inception of new policies and are likely to pay more for levy costs to cover more considerable sums.

“Even if a policy hasn’t been adjusted for the new changes when natural disaster damage occurs, any damage to a home that exceeds EQCover is covered by private insurance, up to the sum insured,” Toka Tu Ake EQC Chief Executive Tina Mitchell said.

Insured property owners covered at the cap’s maximum will pay $NZ480 ($419.90) on their insurance premiums as part of the EQCover levy.

The changes come as part of Toka Tu Ake’s ongoing partnership with eight of New Zealand’s largest private insurers to help policyholders navigate a simplified process when dealing with insurance claims.

“Our partnership model simplifies the claims process for homeowners by giving them a single point of contact if their home is damaged by a natural disaster. It’s as simple as calling your insurer and they’ll manage the entire claim process, including the EQCover component,” Ms Mitchell said.