The Certified Builders Association says if insurers don't start to cover the Christchurch rebuild, residents and businesses will leave the city to start up elsewhere.
Many construction companies in Christchurch say work on building new homes is stalled until insurance companies agree to insure them.
But the Insurance Council says insurers are wary of covering new buildings when they don't know the status of the land.
The association's southern regional manager, Richard Merrifield, says the situation is frustrating for builders and for those in need of a new home or business.
He says there's hardly any work getting done in Christchurch, and construction companies are laying off staff as a result.