We can afford the cost of the latest big quake - Brownlee video

Prime Minister John Key and Acting Civil Defence Minister Gerry Brownlee fly over damaged areas in Kaikoura and Blenheim ...
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Prime Minister John Key and Acting Civil Defence Minister Gerry Brownlee fly over damaged areas in Kaikoura and Blenheim following the 7.5 magnitude quake.

The Government is reassuring those who suffered damage in Monday's North Canterbury earthquakes that their EQC claims will be covered.

Earthquake minister Gerry Brownlee said "people should not be at all concerned".

The EQC had a very good reinsurance scheme, with its latest annual report showing it has $4.89 billion in reassurance available.

Damage from the 2011 earthquake in Christchurch.
DAVID HALLETT/FAIRFAX NZ

Damage from the 2011 earthquake in Christchurch.

It also took in $282 million in insurance premiums in the last year. 

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Even if that was used up, the Government stands behind the fund with a guarantee it will meet claims. 

Cameron Burnell/FAIRFAX NZ

John Key and Gerry Brownlee - Earthquake Press Conference

Brownlee said the reality was that most of the cost of Monday's quake was in infrastructure, such as roads, rail and below the ground services.

"None of that is covered by EQC."

Local and central government would pick up those costs, and Brownlee said the Government was "very conscious" of the small size of the local authorities affected.

The Government had not walked away from the Christchurch after the 2010-11 earthquakes, he said.

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He would have a better idea of the likely cost of the earthquake later on Monday.

The EQC spent $9.4b in its response to the 2010-2011 Canterbury earthquakes, out of the Natural Disaster Fund and from the reinsurance cover it had negotiated prior to the earthquakes.

The EQC pays for the first $100,000 plus GST of damage to a residential dwelling, and $20,000 plus GST of contents damage, and EQC would honour that.

"That's what they've paid for and that's what they'll get," Brownlee said.
 

 - Stuff

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