The cost of Christchurch's earthquake is expected to top $2 billion and the city could take years to recover.
Early claims indicated about 20 percent of people's homes were now uninhabitable.
The Earthquake Commission, which covers insurance holders after natural disasters, has already recieved 1000 claims and is expecting to process more than 100,000.
Chief executive Ian Simpson said about 100,000 claims were expected over the next three moths, the deadline, but international experience showed clean-ups took years.
Severely damaged houses cover the city and surrounding areas, with Civil Defence describing the scene as ''like a bomb site''. Experts say some of the worst damage has been caused by liquefaction - when the strength and stiffness of soil is reduced by earthquake shaking or other rapid loading.
As many as nine out of 10 homes on the city's flat had been damaged by liquefaction, although damage to timber-frame homes would be superficial rather than structural.
Master Builders Christchurch immediate past president Graeme Earl said the region had enough builders to pick up repair work, but many houses would have to be demolished and totally rebuilt, with a starting cost of at least $200,000.
The city's five-year-old Bexley subdivision near New Brighton was devastated, with at least 100 new homes left uninhabitable, homeowner Malcolm Mehlhopt said.
''Most of the homes here have had it,'' he said. His own home was ruined and he was unsure where he would stay the night.
Gaping holes and metre-wide and three metre deep cracks ran through the grounds of some homes and along nearby roads. The bridge across the estuary was closed and badly damaged, he said. ''All the houses have moved, they are on concrete piles and have been pushed up and down.''
AA Insurance received about 50 calls an hour from 7.30am - a 300 percent increase in claims - from Christchurch residents, mainly about housing damage, although there were few reports of vehicle damage.
Deputy general manager Martin Fox expected the claims would cost tens of millions of dollars. He had reassured distressed callers uncertain where they would stay last night, that most insurance policies covered temporary accommodation because of home damage.
AA had bought in extra staff to deal with claims and the emotional distress, financial loss and physical hardships residents were suffering.
Tower Insurance reported receiving nearly 100 claims yesterday, ranging from $20,000 to $300,000 for property damage, and dozens of homes had already been written off. Spokesman Andrew Parkinson said houses had broken in half due to liquefaction when the ground dropped.
Civil Defence reported about 5 percent of buildings in central Christchurch had been hit, but there were no reports of people being trapped despite the widespread damage.
It reported many minor bridges had been damaged but all the major bridges and transport routes were open.
The Fire Service had divided the city into grids and sent staff in to assess the damage, while Telecom had urged customers to use mobiles only for emergency calls, and to avoid sending text images and videos. It was also bringing in generators after power failures.
Civil Defence staff member Dave Miller said the city looked like it had been hit by a bomb, but while power was down across most of the city early on, by late morning it had been restored to most of New Brighton and Dallington, as well as at the airport and Christchurch Hospital. By last night 90 percent of the city had its electricity restored.
Supermarket stock losses won't be known until today, but nightfall staff who were on duty stocking shelves when the quake hit escaped injury.
- Sunday Star Times