Natural Hazard Fund
We manage the Natural Hazard Fund on behalf of all New Zealand homeowners. The fund is used to cover claims from insured homeowners for damage following a natural hazard.
Each year New Zealand homeowners pay a Natural Hazards Insurance Levy (formerly known as the EQC levy) as a part of your private insurance premium, which goes into the Natural Hazard Fund.
While the Government sets the levy amount, we manage the fund, which includes investing and administering it. Over time, the levies and returns from our investments help to grow the fund.
What your natural hazards insurance levy pays for
Your levy is used across three cost areas.
Cover after a natural hazard event
Most of your levy goes into the Natural Hazard Fund and is invested to help pay future claims after a natural hazard event. Through the scheme, if your insurance policy includes fire cover, you have access to natural hazard cover (NHCover).
Access to NHCover means you can make claims after natural hazard events for damage up to $300,000 to your home, and an additional contribution towards damage to some of your land.
Research and education to lessen the impact of events
We invest in research and education to help make the communities where you live, work and play more resilient. Our research and education help us to better understand the risks New Zealand carries and promote proactive steps to reduce the impact of natural hazards.
Reinsurance to manage financial risk
A portion of your levy buys reinsurance to ensure the fund can still pay claims if a big natural hazard occurs.
Reinsurance is insurance for insurers. About 14% of your levy is used to pay reinsurers a premium every year for reinsurance cover.
From 1 June 2025, our reinsurance protection is $10.3 billion, which includes $225 million from a multi-year catastrophe bond placed in 2023. This bond is a way for us to get extra money from investors to help if a big natural hazard event strikes.
Like many other forms of insurance, we will have to pay an excess if we make a claim with our reinsurance company. The current excess on reinsurance cover is $2 billion. We must be prepared to meet the costs of all claims up to $2.101 billion before we can call on our reinsurance cover. This excess is charged for each natural hazard event that happens.
The Natural Hazards Insurance scheme has a government guarantee
The scheme is supported by a government guarantee. This means that if there is a major natural disaster and we can’t fulfil our obligations through the fund and reinsurance, the government will provide a loan to meet the shortfall.
The Funding and Risk Management Statement sets out financial governance
The Government’s Funding and Risk Management Statement (FRMS) sets out how the costs and risks of the scheme are shared between the Crown and levy payers. It’s a key part of the financial governance of the Natural Hazards Insurance scheme.
The Statement provides estimates of the cost of providing the scheme’s natural hazards cover, and projections of the amount in the fund. It also sets out information about how the government has determined the levy and financial settings.
Funding and Risk Management Statement(external link)
How the Natural Hazard Fund is invested
The money in the Fund is invested in accordance with relevant provisions of the Natural Hazards Insurance Act 2023, Ministerial Directions made under the Act, and the Crown Entities Act 2004.
Over its history, the fund has been invested in a mixture of New Zealand government securities and global equities.
We also comply with the United Nations Principles for Responsible Investment – consistent with the approach of other Crown Financial Institutions.
Rebuilding the Fund after the Canterbury earthquakes
In 2010, the Fund had accumulated to over $6 billion. Following the Canterbury and Kaikōura earthquake sequence, the entire fund was used up to settle claims for earthquake damage.
We are working to rebuild the Fund, through levies and investments.
Statement of investment policies, standards and procedures [PDF, 351 KB]