The New Zealand earthquake levy is set to double as the Government rebuilds the financial position of its disaster pool.

Two massive earthquakes in the space of six months have drained the resources of the Earthquake Commission, which prior to the September 2010 quake had $NZ6 billion ($4.25 billion) in the bank plus $NZ2.5 billion ($1.88 billion) in reinsurance cover.

Prime Minister John Key warned in February that the fund had been “severely depleted” and that rates would have to rise.

Consumer NZ CEO Sue Chetwin says the doubling of the earthquake levy will in turn see home and contents premiums rise by around 20%. And Swiss Re says reinsurers are also likely to lift their Asia-Pacific rates by 20% at the June 30 renewals.

In February Munich Re board member Ludger Arnoldussen warned that NZ would face price increases of at least 10% during the 2011 renewals.

Despite the predicted jump in rates, Dr Arnoldussen said rates would still remain well below Californian premiums, which are up to 15 times higher than New Zealand.