Another $1 billion

The NZ Herald reports:

The taxpayer’s share of the $29.5 billion bill for rebuilding Christchurch is set to rise yet again – by as much as $1 billion according to Prime Minister John Key – after a High Court decision late last week.

Late on Friday the court issued a declaratory judgment confirming the Earthquake Commission’s maximum cover of $100,000 for properties and $20,000 for contents applied to claims resulting from both the September and February major quakes and associated aftershocks, rather than just the first one.

The decision effectively shifts hundreds of millions of dollars in liability for quake damage from private insurers to the EQC which only last week raised its estimated liability from $3.05 billion to $7.1 billion.

Mr Key said the additional liability for the EQC could be as much as $1 billion.

Again no choice over this one, and the court decision is the right one that they should be treated as two different earthquakes. The ruling may encourage the global reinsurers to remain in the market also.