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Homeowners with more expensive properties would pay higher EQC levies under a policy announced yesterday by Labour but there is no guarantee those homeowners would receive higher payouts if disaster struck.
Labour Canterbury earthquake recovery spokesman Clayton Cosgrove said in an interview the payouts would be part of the negotiations a Labour government would hold with the insurance industry and EQC.
Also part of the negotiations would be an independent insurance commissioner, appointed by Labour, to protect consumers and resolve disputes.
Labour would make EQC coverage universal by collecting levies through the local authority rates system.
That would mean everyone who owned a home would be insured, eliminating the "moral hazard" of covering uninsured homeowners which penalised people who paid for private insurance cover, Mr Cosgrove said.
"This system is simpler, keeping compliance to a minimum by incorporating the levy in quarterly rates collections."
Labour leader Phil Goff and Mr Cosgrove announced the policy in Bexley, one of the Christchurch suburbs hardest hit by the earthquakes.
Mr Goff said the sheer scale of the earthquakes severely tested EQC.
While it largely stood up to the challenge, the natural disaster fund was now depleted and it was clear the system needed modernising.
The policy said Labour would investigate altering the EQC levy to make it progressive, rather than a flat rate.
More valuable properties were likely to incur more expensive damage in an earthquake than less valuable properties. Owners of more expensive homes were likely to receive greater payouts than owners of less expensive homes, despite all homeowners paying the same flat-rate EQC levy.
Mr Cosgrove said there were no costings available for the policy because that would form part of the negotiations with EQC and the insurance industry.
But if the Government was going to take a "large slice of the action" then insurance companies would not be expected to hike premiums.
He understood that some insurers were already lifting premiums in areas not affected by the earthquakes as part of "claw back".
Labour would also investigate raising the cap on EQC cover from $100,000 in consultation with EQC and the insurance sector. The cap was set in 1993 and did not reflect the steep increase in house values and building costs since then.