About 55% of the properties in New Zealand’s earthquake-prone building system will be removed under proposed reforms.

The government estimates 2900 buildings will be cut from the system, while 1440 will have more affordable remediation requirements. Another 80 require a full retrofit.  

The Insurance Council of New Zealand says insurers make decisions on cover based on underlying risk, and the proposed changes will not alter that.

The EPB system was introduced in 2017 in response to the Canterbury Earthquakes Royal Commission. Last year, Business Minister Chris Penk initiated a review.  

It is estimated 5300 earthquake-prone buildings await remediation or demolition, but Mr Penk says many owners cannot afford the cost.

Buildings are left empty, making them more dangerous in quakes, and apartment and business owners cannot sell their properties.

Under the proposal, buildings in low-seismic zones such as Auckland and Northland will no longer be captured in the EPB system, and new tiered mitigation requirements will mean property owners do not have to complete all work at the same time.

ICNZ told insuranceNEWS.com.au if the risk profile of a building changes, insurers will take this into account when determining cover and pricing.

The industry continues to encourage government to develop standards that minimise building damage from natural hazards, including earthquakes.  

“Clear and consistent rules will give building owners, communities and insurers greater certainty and help keep cover more widely accessible,” he said.