Insurance companies are rallying together on the heels of a devastating earthquake that rocked the New Zealand city of Christchurch. They are expected to pay millions in claims. Chris Ryan, the chief executive for the Insurance Council of New Zealand, says that it is difficult to estimate the total cost of the quake as the buildings that collapsed were damaged by a previous earthquake in September of last year.
A powerful earthquake struck Christchurch during its lunchtime rush. The magnitude 6.3 quake toppled office building, flattened homes and at least 65 people are confirmed dead with more missing. New Zealand’s Prime Minister, John Key, told 3 News New Zealand that “We may be witnessing New Zealand’s darkest day.” He has warned that the death toll may rise significantly throughout the search and rescue effort.
A previous earthquake in September resulted in buildings and homes being damaged, making it difficult to ascertain how much premiums would rise as a result of today’s quake. The September quake caused $NZ1.5 billion in damages. Officials are estimating that the total cost of the earthquake will be higher, but are unable to give an exact amount.
The New Zealand Earthquake Commission offers compensations of up to $NZ100,000 for building that have been damaged and $NZ20,000 for their contents. Insurers are not likely to pay claims that exceed these amounts.
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