Christchurch City and Waimakariri District councils now have billions of dollars' worth of assets that are uninsured against earthquake damage.
Their policies with Civic Assurance expired on Thursday afternoon, and they've been unable to find new cover.
Christchurch City Council alone needs material damage insurance for $2.8 billion worth of above-ground assets - including council buildings, libraries and the AMI Stadium - and below-ground assets such as sewerage.
Canterbury Regional Council will also be without millions of dollars of quake insurance in three weeks' time.
The crisis was triggered by the refusal of reinsurers stung by the Canterbury quakes to give further reinsurance to Civic Assurance.
Christchurch mayor Bob Parker says the council's brokers have been in talks with reinsurers in Europe but there is effectively a moratorium on providing cover for Christchurch following continued tremors.
He told Checkpoint the council has secured fire insurance for some council assets but not quake insurance.
"If an undamaged building which is currently fully serviceable was hit by a major earthquake at some future time, at the moment there would be no earthquake cover for that building and the liability for any rebuild or repairs would simply pass to the ratepayers and/or the Government in some way."
Regional council also affected
Waimakariri District Council is also without earthquake insurance cover now, although it does have cover for fire and floods.
Canterbury Regional Council says it has about $60 million worth of assets in Christchurch that it has not been able to insure beyond 20 July.
Its finance and corporate services director, Wayne Thomas, says without insurance the cost of repairs for any future damage to the council's assets could be paid for by several generations of ratepayers.
He says all three councils have gone to the Government for help.
Councils' insurer can't get cover
All three councils had been covered by Civic Assurance, which is owned by local authorities and provided material damages cover for 46 councils around the country.
But Civic says following the June aftershock in Canterbury, it has been unable to source reinsurance.
Earlier this week, the Government said if there is further damage to essential infrastructure, then the repair costs would be split between ratepayers and taxpayers. It said essential infrastructure did not include council buildings, pools or libraries.