A world-first agreement between New Zealand’s state-owned Earthquake Commission (EQC) and eight private insurers comes into effect on Wednesday, putting an end to double-handling of natural disaster claims.

Under the new arrangement, AA Insurance, Chubb, FMG, Ando (Hollard), IAG, MAS, Tower and Vero will assess and manage EQC claims, acting in the same way as agents.

Vero New Zealand EGM Claims Campbell Mitchell says the new Natural Disaster Response Model uses learnings from prior disasters.

“The Canterbury earthquakes demonstrated that New Zealand’s dual insurance model resulted in double-handling of claims for customers,” Mr Mitchell said. “Vero has continued to advocate for a new approach.

“It’s a huge step in the right direction to enable us to respond faster and more efficiently.”

The change means New Zealanders have a single point of contact -- their private insurer -- if their home or land is damaged in a natural disaster. Insurers will act on EQC’s behalf to assess and settle both the EQC and insurers’ portions of claims seamlessly.

Vero New Zealand and EQC piloted a joint response model early in 2015 and later that year it was used across the after the Kaikoura earthquake.

Insurance Council New Zealand (ICNZ) CEO Tim Grafton says the new scheme “puts the customer at the heart of one of the most unique and responsive natural disaster response platforms globally”.

It ends the former “two-step” process used after the Canterbury earthquakes a decade ago, under which cases that went over the EQC’s claims management cap of $NZ150,000 ($139,656) were forwarded on to private insurers where the process started all over again.

EQC CEO Sid Miller has previously told insuranceNEWS.com.au the post-Canterbury method was “very messy and difficult” and “led to incredible frustration”.

Under the new partnership model, private insurers will assess, manage and settle the entire claim – including the EQC portion – up to the sum insured.

“Instead of dealing with EQC as well as your insurer, customers will now just deal directly with their insurer for the lodgement, assessment and settlement of all future claims,” Mr Miller said.