The Earthquake Commission says it has received 70% more claims than it was expecting for damage caused by the Canterbury earthquake.
The 7.1-magnitude quake on 4 September last year caused widespread damage.
Earthquake Recovery Minister Gerry Brownlee says the disaster is the largest event New Zealand insurers have ever dealt with and the EQC could end up paying out as much as $3.5 billion.
Mr Brownlee says the commission has so far paid out more than $620 million.
Half of the 170,000 claims made have been assessed and the rest should be done by the end of March, he says.