Uninsured homeowners in quake-stricken Canterbury will be eligible for government financial aid if they can demonstrate genuine hardship.
The Insurance Council has welcomed the move, saying the magnitude 7.1 quake on Saturday was an exceptional and devastating catastrophe which called for compassion.
Estimates put the cost of repairs at $2 billion, with claims from at least 100,000 households expected to cost the Earthquake Commission (EQC) about $1b.
People with private insurance could claim up to $100,000 on buildings and $20,000 for contents from EQC, after which their private insurance would kick in.
But an estimated 10 percent of Canterbury households did not have private insurance and were therefore ineligible to make claims through the EQC.
That means up to 10,000 households with damage to their homes or contents may not have been insured.
Prime Minister John Key said yesterday the Government would consider financial aid for uninsured people who were able to demonstrate genuine hardship.
An example of someone who might be considered for support was an uninsured pensioner with no debt on their home and no significant income, he said.
But Mr Key cautioned that care was needed in dealing with the issue, saying the clear message to New Zealanders was that they should be insured.
Insurance Council chief executive Chris Ryan said today the quake was "a very exceptional and devastating catastrophe" and compassion was needed for those without insurance.
"We spend a lot of our time trying to encourage people to be insured, but the reality is a lot of people make a decision not to be for whatever reason.
"We can't just ignore them. This is an exceptional time, and it's a time where we need to help everybody."
Mr Ryan told NZPA it was important for the wider economy that everybody was able to get back on their feet.
"The whole community needs to work together. Maybe at a later time we'll talk about the levels of insurance and try and address that, but I think now it's a time for compassion," he said.
"If that means assisting people that are not insured, then that's what we need to do. We need to get them back on their feet as well as the insured parties."
The Earthquake Commission said yesterday it could take up to a year to settle the more than 100,000 claims expected.
It has set up three operations centres in Christchurch, with about 40 staff in each, to deal with an anticipated bottleneck.
It has already received 15,000 claims.
Mr Ryan said it was too early to say how long it would take to deal with all the private insurance claims.
"For private houses, we have to go through the Earthquake Commission first, so we'll really take the lead from them.
"We'll have everything from very small repairs to houses to major commercial buildings. Those big commercial buildings will certainly take a year.
"We will try and settle the vast majority of claims as quickly as possible. I think the thing that will hold up the private insurers will be the availability of materials and possibly the availability of labour and tradespeople."
NZPA