Local councils across New Zealand may be left without earthquake insurance cover if their mutual pool insurer, the Local Authority Protection Program (LAPP) Disaster Fund, is unable to secure reinsurance.

At a meeting of the Christchurch City Council’s audit and risk management subcommittee last week, Corporate Finance Manager Diane Brandish said it’s not yet clear whether its policy, which expires on June 30, will be renewed.

“There is no firm assurance that insurance cover will be available due to difficulties for our insurers securing reinsurance,” she wrote in the council’s corporate finance report.

The council, along with 58 of New Zealand’s 84 other local authorities, is insured by the disaster fund, which is administered by Civic Assurance.

Civic Assurance GM Christopher Munden told insuranceNEWS.com.au it’s too early to tell whether Christchurch City Council will secure a renewal for its earthquake cover.

According to Ms Brandish’s report, the issue only exists for earthquake covers, with cover for other risks expected to be available.

“This position is one that most other councils will be experiencing,” she said.

And if cover is attainable “it will come with a significantly higher premium, possibly as much as 400%”.

“The excess will also be significantly more than the $5000 (for material damage) and $500,000 (for LAPP) of our current policies, but as yet we have no clear indication of what these will be.”

If it is unable to obtain earthquake cover, the report says Christchurch City Council will be self-insured “and dependent upon the strength of our balance sheet and support of central government”.

The council will outline the potential cost of the problems in its draft annual plan to be released later this week.

Christchurch City Council’s broker, Aon, was also unavailable for comment.