New Zealand significantly increases earthquake damage estimate

CANTERBURY, New Zealand—The New Zealand government Tuesday increased its estimate of its liability from the earthquakes that hit the Canterbury area of the country in September, February and June to about $7 billion New Zealand ($5.88 billion) from a previous estimate of about $2.6 billion New Zealand ($2.18 billion).

The Wellington-based Earthquake Commission, which offers earthquake coverage to insured homeowners, said in a statement that all claims will be settled in full.

Commercial claims are covered by insurers.

The Earthquake Commission is funded by levies on insurers.

Ian Simpson, CEO of the Earthquake Commission, said that while residential claims were larger than originally expected, the government would underwrite any shortfall in the fund.

The Earthquake Commission, which has paid out more than $1.4 billion New Zealand ($1.18 billion) in claims since September’s temblor, had about $6 billion New Zealand ($5.04 billion) in its natural disaster fund prior to the September quake, Mr. Simpson said in the statement.

He added that the commission had secured reinsurance coverage for next year.