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Body Corporate Insurance Glossary

NHC Cover (NZ)

NHC (the Natural Hazards Commission Toka Tū Ake) provides automatic first-layer natural disaster cover for residential buildings in New Zealand: up to NZ$345,000 + GST per dwelling unit for damage from earthquake, volcanic activity, hydrothermal activity, landslip, and tsunami. Premiums are paid via the NHC levy on private fire insurance.

For body corporates, NHC cover applies per residential unit, not per building. So a 20-unit body corporate has up to NZ$6M of NHC cover before the private insurer's natural disaster cover layer kicks in.

NHC also covers some land damage (within defined limits). It does not cover commercial buildings — so a body corporate with mixed residential/commercial units will have NHC apply only to the residential portion.

Following the 2011 Canterbury earthquakes, NHC's settlement processes and the private insurer interface have been the source of many disputes. For body corporates in seismic regions, choosing an insurer with strong NHC coordination experience matters.

See also

Related terms

Natural Disaster Cover

Natural disaster cover is the layer of insurance that responds to damage from earthquake, volcanic activity, tsunami, landslip, and (in most NZ policies) flood. For body corporates it sits above NHC's NZ$300K per-dwelling first layer.

Sum Insured

The sum insured is the maximum amount an insurer will pay out for a covered claim. For body corporate building insurance in New Zealand, it is set to the estimated full replacement (reinstatement) cost of the building, including demolition, professional fees, and inflation provisions.

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