Future governments must pass legislation to clarify how they will treat uninsured property owners after natural catastrophes says the Insurance Council of New Zealand.    “The settlement in the Quake Outcasts case announced yesterday raises concerns that people may not insure their properties.  While it is positive that the offer was for less than 100 percent of the property value to acknowledge the lack of insurance, there is still a moral hazard for the Crown because increased levels of government support in place of insurance will provide a greater incentive for people not to insure their property” said Insurance Council Chief Executive Tim Grafton.  To avoid this moral hazard, successive governments have supported the EQC scheme, which provides insurance protection for events like earthquakes, landslips, volcanoes and tsunamis. The EQC Scheme attaches a levy on every insured property so if people don’t take out insurance they don’t get EQC cover.   “It therefore makes no sense at all for the Crown to be stepping in to pay out to the uninsured. It simply it isn’t fair on all those that take out insurance” he said.  “Clarity and certainty is required as to how the government treat the uninsured and in doing that they must avoid undermining the EQC scheme and being unfair to those who insure themselves. Specific legislation is required and the current review of New Zealand’s natural disaster insurance scheme in the Earthquake Commission Act provides that opportunity” he said.