Clause 3 states that the purpose of the Bill is to facilitate the prompt settlement of insurance claims arising from uninhabitable residential properties.

Clause 4 is an interpretation provision. It defines terms used in the Bill.

Clause 5 provides that the Bill, when enacted, will bind the Crown.

Clause 6 provides that the Bill applies to every contract of insurance entered into by an insurer that insures a residential property to the extent that the law of New Zealand applies to the contract. Because the Bill applies only to a contract of insurance entered into by a licensed insurer (as defined by section 6(1) of the Insurance (Prudential Supervision) Act 2010), Crown entities such as the Accident Compensation Corporation, the Earthquake Commission, and the Housing New Zealand Corporation are excluded from the ambit of the Bill. Section 8(2) of the Insurance (Prudential Supervision) Act 2010 expressly states that these Crown entities do not carry on insurance business in New Zealand and hence they cannot become licensed insurers for the purposes of that Act.

Clause 6 also provides that the Bill applies despite any provision to the contrary in any agreement, contract of insurance, enactment, or rule of law.

Clause 7 prohibits contracting out from any of the provisions of the Bill. It states that a provision of a contract of insurance has no effect if it does, or purports to do, certain things to the disadvantage of the insured, such as excluding, restricting, or modifying the operation of the Bill.

Clause 8 provides that Part 2 applies to uninhabitable property.

Clause 9 requires an insurer that receives a claim in respect of a residential property that has become an uninhabitable property to take all reasonably practicable steps to ensure that the claim is processed as promptly as possible. The insurer must decide whether to accept or decline the claim and notify the insured of this decision within 6 months of receiving the claim.

Clause 9 is subject to clause 10 and clause 12.

Clause 10 provides that, in exceptional circumstances, an insurer may take up to 12 months to decide whether to accept or decline a claim and notify the insured of this decision.

Clause 11 provides that, if a state of national or local emergency is declared, the Insurance Council may apply to the Minister for an extension to the 6-month deadline specified in clause 9.

Clause 12 authorises the Minister, on receipt of an application from the Insurance Council under clause 11, to grant an extension of up to 12 months from the date on which the national or local emergency was declared.